Quote from @Austin Gagne:
Quote from @Taimur Khan:
Hi All, have spent a few days browsing these forums. Longtime entrepreneur (education & e-learning space) that is finally putting in more energy and effort into RE investment in Canada outside of REITs and personal homes.
We have a trip to Edmonton & Calgary next week for an initial scouting. Looking for a blend of income + cap gains. Given that other Canadian markets have appreciated immensely, we feel these two markets will be next despite cyclical dependence on oil in the past. Opinions? Are we completely off and it is just an energy cycle now?
Also, if you were to invest in homes with legal suites or smaller multi-family (4-6 units) which neighbourhoods would be on your radar? TIA.
Looking to learn more with everyone here!
Hi Taimur,
How your scouting trip go?
Here's my two cents on appreciation in the Alberta market:
Yes, with other Canadian markets going up and with positive population growth you would think that Alberta should be next to appreciate. But at the same time you have to keep in mind that cities in Alberta are not particularly geography or regulation constrained in the same way that other markets are (e.g. Lower Mainland). It's hard for housing to appreciate as much when you can just build a new neighbourhood on the next farm field over. On the other hand you can certainly get much better CoCRs.
Yes, I do believe that some Alberta neighbourhoods/micro-markets are likely set to appreciate, but I do not think that's going to be a trend across the board as in other places, so you're going to have to pick your spot. If you want some appreciation I would ask yourself, "if new units are build, is there something that STILL makes this more scarce than locations"? Personally, I do commercial/retail, so can't tell you exactly where that would be, but that would be my general framework. If you're worried about appreciation I would be very picky about buying in proximity to something that make it a desired location, and I would not buy in a peripheral market where new construction is essentially only limited by the cost of construction.
Hi Austin,
Thanks for your feedback and thoughts. Yes, I reached the same conclusion with regards to Edmonton. It just does not make sense if a goal is cap appreciation. The inner city overall is not that attractive, and the suburbs are close enough, cheap enough, and new enough that infills hardly make sense. If only rental income is the goal, then yes, I saw some great returns on some row homes with no strata fees. But in that case I'd rather keep it in the markets as it's still just 7% ish and comes with extra work and distance. If local to me, could be more attractive.
Calgary left a better impression on me as an investment center, but as you mentioned, seems construction costs are what are setting the prices at this stage.
