The real estate market isn’t only for people searching for a home; there are a lot of investment opportunities available in the Calgary real estate market. With the help of some background knowledge and an experienced Calgary Realtor®, you can start investing as little or as much as you want. There are more ways to invest in the Calgary real estate market beyond just buying or becoming a landlord, although these are also two great options that will be discussed. While other forms of investment may not be as familiar to you, they are worth learning about and discussing with a Calgary Realtor®.
How To Invest In Real Estate
1. Principal Residency Property Investment
Purchasing a permanent place of residency is more than just buying a place to live, it’s making an investment. Unlike renting, when you own a property you aren’t paying money to help someone else pay off their mortgage, you are paying your own mortgage and building your wealth. When your home is registered as a principal residence, the Canada Revenue Agency allows a tax exemption from any profits earned by selling the principal residence. This allows you an exemption on all capital gain taxes you would otherwise owe when selling a non-principal residence property. Consider your debt-to-income ratio before purchasing a home, as this may limit your approval for a mortgage.
2. Residential Rental Income
Renting out your property has long been a way of helping to make payments on a home and turn a profit. When you purchase a home that you are renting out, you need to find a balance between keeping rent high enough to cover the mortgage and house expenses while also making the home affordable enough to have renters want to live there. The price you can charge for rent will vary depending on average rental prices throughout the city as well as the size, condition, age, and location of the home. Another aspect to consider is your role as a landlord or property manager. You will have to maintain the home and may need to be involved with tenants beyond just signing contracts and collecting rent. Any and all problems with the home or appliances may fall to you and other, smaller matters may arise, such as lost keys or noise complaints. One potential way to avoid these issues is to hire a property manager, but this is an added expense to consider.
Another important factor to consider is how you rent out the home. You could purchase a single-family home and rent it out to a family, you can purchase a multi-family home and live in one portion and rent out the other portion, or you could purchase a multi-family home and rent out the whole house to multiple families.
3. Flipping
Flipping a property can be a great investment, especially if you find a well-priced foreclosure listing. Flipping is essentially buying a home, renovating it to increase its value, and then selling it for more than the combined cost of purchase and renovations. While this seems straightforward, you do have to be careful. Finding a really low-priced home may mean that it has a lot of problems that need fixing or it’s in an undesirable area, which is something that may limit you from selling it for a higher profit.
4. Use The Property For A Short-Term Rental
While still a form of rental, there are websites that allow you to rent out your whole property or just a portion of your house. You could rent out one floor of your home or even a single bedroom as a way to make some cash without making a large initial investment. These short-term rentals can be for as little as one night or as long as one month, depending on your preference. Before renting, ensure you can comply with both the regulations of your short-term rental service company and any municipal bylaws, condo board rules, or strata laws.
5. Renting Commercial Space
While uncommon, renting out a commercial space can yield large gains. This is one of the most expensive markets and it can generate over 4 times as much as residential renting. Despite the impressive payoff, commercial space renting does require a large capital investment and plenty of hands-on managing that will be different depending on the type of commercial space you are renting. If you want in on this market without the same amount of financial investment and time commitment, you could instead invest in a Real Estate Investment Trust (REIT). REIT companies own large numbers of properties, both commercial and non, and they have shares publicly available. This strategy makes real estate investment more accessible, but it is recommended to invest with the help of either a broker or a Realtor®.
Real Estate Investing With An Experienced Calgary Realtor®
Whether you are interested in investing in Calgary real estate through owning a principal property, becoming a landlord, or investing, the Calgary real estate market can be difficult to navigate on your own. When you partner with an experienced Calgary Realtor®, all of your investment options can be clearly explained and you can find the best deals on Calgary homes. The Mel Star team of Calgary Realtors® can help you determine which Calgary real estate investment is right for you and your lifestyle. To contact the Mel Star team, either call 1-403-861-9944 or fill out the contact form.
For Calgary home buyers looking to own, rent out, or flip a property, view featured listings here. For home buyers looking for affordable home deals, especially for those interested in flipping, learn more about Calgary foreclosures and bank foreclosures here.
FAQ
With a power of sale, the lender (the bank) must sell the property for the highest price possible to cover any legal costs associated with the foreclosure process as well as pay off the missed mortgage payments from the homeowner. Once the sale is complete and all debts are paid off, the remaining balance will go to the borrower (homeowner).
The bank wishes to sell the property as fast as it can to recuperate the lost money from the missed mortgage payments by the previous homeowner. This is often why foreclosure properties are listed at lower prices to attract buyers.
Navigating the Calgary real estate market can be difficult, especially if you aren’t aware of all of your options or when it’s a seller's market. A good Realtor® should do the following for you when investing:
- Know the value of the homes you look at
- Advise you about different investment opportunities
- Comb through MLS listings and open houses
- Represent you well in possible multiple offer scenarios
- Keep a calm head during negotiations
- Diligently navigate contracts and closing
- Connect you with other professionals as needed
A Star Team Working For You
The Mel Star team combines experience, insight, influence, connections, and access to the most cutting-edge marketing technologies to deliver results to buyers and sellers in Calgary’s Real Estates market. Our award-winning team will guide you through the process of buying or selling with smart strategies, skilled negotiations, and a customer-focused approach. Connect with us today to begin your journey to a successful Real Estate close. Call us at 1-403-861-9944.
CONTACT US
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