All Forum Posts by: Ken Didychuk

Hi Kylene

Your realtor really should be helping you with a lot of this. Conditions could have been placed in the offer to allow you to interview the tenants beforehand. Odd that you would receive an answer on the lease particulars of one suite but not the other. If you are already familiar with screening tenants for commercial purposes, then you'll be fine with your screening for residential purposes. As for the utilities, you can (and should) register with the utility companies as the owner. If the tenants default, you will be notified (but not charged). All my rentals are legally suited up/down bungalows. Reach out if you'd like to compare notes! 

Cheers

Something to keep in mind about investing ANYWHERE. In every town/city, in every market cycle, there will always be a demand for QUALITY. You can certainly make much more money with sub-standard properties by pure volume (think "lower cost of entry"). The headaches and management issues with sub-standard tenants are not worth it for me, but that's only my subjective opinion. I've developed much higher quality rental units (not luxury) and as a result, higher quality tenants. Cash flow is lower, but consistency through all market conditions is well worth that trade-off. Everyone knows that turnover is our highest non-damage related revenue killer. If I had to recycle my tenants every time there was an economic transition, I would have been out of business long ago. And yes, here in Alberta there are many such economic transitions, maybe even more so in a smaller city like here in Red Deer.

I agree with @Anthony Therrien-Bernard. My favourite has always been the glue down LVP since that also forces you to properly prep your subfloor beforehand. I haven't used surrounds in a long time now and tile all my showers and tubs. If this is work you are doing yourself, you can make sure the quality of your waterproofing is done correctly to avoid the obvious headaches (and heartaches) of water damage. Tile will also greatly increase the value of your property as well.

If you are comfortable with operating a little remotely, check out the market a little ways up the QEII. The Red Deer market is still $100k-$150k less than Calgary and rents are as high as anywhere else in Alberta these days. If you are more adventurous, you can look at Rocky Mountain House, where rents are even higher than Red Deer with house prices about $60k less.

Something to keep in mind when comparing market values. Builder values are not a good benchmark to gauge marker conditions. Their prices are set by commodities, supply chains, labour availability, and of course profit. To get a solid understanding of where your market sits, you will need to follow what properties have SOLD for, not what they are listed for. The value of anything is what someone is willing to pay for it, not necessarily what it costs to produce or what they are listing it for.

Get ahold of me if you'd like to talk shop and I can give you more insights to consider.

Drive safe!

You may want to consult a local accountant and find those resources *before* starting up the company. Especially if you have two partners. There are a lot of moving parts and really, a local lawyer should be part of the conversation as well. 

Likely the biggest issue you may have is finding the right property that will cash flow adequately (and that number is different for each of us), never mind two properties. For many, floating just above the that cash flow line isn't worth the effort unless you are shooting for appreciation. Finding suited properties will almost always yield better cash flow, but there are considerations with that strategy as well. Are you planning on buying these properties in your backyard? Are you planning on managing them yourself? Those questions will also play a role in how best it may be to move forward. I've developed many legal suites myself and I also self-manage so if you'd like more info on that route, please feel free to DM me.

Alberta has been a great place for landlords to begin their journey with more favourable laws and a lower cost of entry. Central Alberta is even better with some of the most affordable housing in the country (without being hours from a major city). As mentioned, study, study, study. That will never fail you, even if you seem to "miss out" in the mean time. You will be much more prepared to spot and engage in an opportunity that yields much higher results by preparing. Seeing opportunities pass by can feel uncomfortable, but jumping on them without being prepared is much much worse. I can attest to that more times that I'd like to admit. And keep in mind, opportunities are limitless so just learn and search for the next one. Send me a DM if you'd like to chat about the markets out here!

Heya Hebron!

@Zorya Belanger is a local Edmonton multi-family investor who may be able to help you out.

Cheers!

Hey Ian

I've built my portfolio of SFRs in Red Deer. I've developed secondary suites into all of them so my take on everything will be from a different angle yet again. As mentioned above, every market has opportunity, and there will always be opportunity in every economic cycle as well. If you position yourself properly, you can stay at full capacity and have cash-flowing assets even during periods of higher vacancy rates in the rest of the market. Location and transportation are important, but likely not as much in a smaller blue-collar city such as Red Deer. There will always be crime no matter where you go, yet the smaller communities tend to get labeled unfairly in this regard (one murder in a city of 800,000 compared to one in a town of 600 for example).

The city is very easy to get around and being just off highway 2, it would even be possible to self-manage from either Edmonton or Clagary.

There are certainly areas to avoid in town when it comes to holding rentals (especially from a distance), but even those areas aren't all that terrible.

Shoot me a PM, I can certainly help you out with any questions or ideas you have.

Cheers!

One of the only ways to hit and maybe surpass that rule a little is to develop alternate income streams on the property, which you already alluded to. Developing a secondary or carraige suite will yield your biggest gains. Some districs will even allow you to develop both on the same property. Rent out the garage on that property and you now have 4 separate income channels on a SFR lot.