A lot of you are planning for the future, planning for retirement and for the potential of multiple streams of income.
I get many questions about purchasing a rental property.
Here are the top 6 things to think about from the Calgary Real Estate Board.
The location of a property will determine the type of renters that will want to live there. Central areas generally have the highest demand, but less-pricey options in working-class areas often have better cash flows. Opt for high-growth areas over those that are in decline. Safety is also an important concern. Renters steer clear of unsafe neighbourhoods, so make sure your income property is in a safe and secure area.
The monthly rent you can charge for a given property will be crucial to determining whether it could be a solid investment. Determine average rental rates in the area to make sure the rent you charge will be able to cover your mortgage payment, taxes and other expenses like insurance every month.
Shopping, parks, restaurants, schools and public transportation are just a few of the amenities renters will be looking for, so make sure they are nearby when choosing a property.
An area with a high number of vacancies, indicated by a lot of housing inventory on the market, means it might be difficult to find renters for your property. It might also reduce the amount of rent you’ll be able to charge, impacting your cash flow.
5. Property Taxes
Property taxes are a cost you will have to shoulder with any investment property, so make sure you review the most recent tax assessment to determine if they are high, and if so, why that is the case.
This is another cost you will have to factor in when determining your cash flow. Try to avoid areas where your coverage options might be limited or non-existent, such as a flood-plain or other area that is susceptible to natural disasters.
These are the top 6 factors to consider according to the Calgary Real Estate Board. If you have any questions, please let me know. A decision like this is definitely worthy of a conversation.