Calgary is a great place to invest in a rental property because of its livability, long-term stability and appreciation prospects. Still, future landlords need to have a strategic mindset when looking for a property to buy to rent it out.
Buyers must look for specific items to ensure the property’s rental market appeal and future profitability. If you’re in the market for an investment property, these are the items you should look for to find the right one.
10 Items a Great Investment Property Must Have
1 – Location
If you’re familiar with the “Location, location, location” saying, you know why this is the number 1 item on the list. A property in a popular area will ensure cash flow and low vacancy rates, which are fundamental to success as a landlord.
Look for properties in areas that are close to amenities such as schools, transit, shopping centres, restaurants and medical facilities. Concentrate your search efforts in neighbourhoods with a good Walk Score. We have an article covering some of the best areas in Calgary to buy an investment property to help you start your search.
2 – Set Your Budget
Once you trim down your target neighbourhoods, determine how much you can spend by assessing your financing options and the potential impact of interest rates. Calgary has options for different budgets, ranging from $697,600 for detached homes to $316,600 for condos.
3 – Before Choosing a Condo, Assess Its Potential Downsides
If you’re considering a condo, keep in mind that the maintenance fee will often go up yearly. Other things to consider are that you may have to deal with condo board meetings (and the potential conflicts) and comply with Alberta’s condominium bylaws and the additional rules each condo has.
And if you’re buying a new unit, you must add the “phantom rent” to your budget. This is a rent fee paid to the developer to cover the taxes and upkeep costs between the period the buyer takes ownership and occupies the property.
4 – Economic Development
Consider neighbourhoods near growing commercial areas. If there are company headquarters or branches around, the chances of picking the interest of potential tenants looking for new employment opportunities close to your property is high.
5 – Schools
Choosing a property close to a good school district is essential to attract long-term tenants like families with children. Renting your property for long periods is one of the best ways of ensuring a steady income and a faster return on your investment.
6 – Rent Average Prices
Research the average rental prices for similar properties in the areas you’re considering, calculate potential rental income, and compare it to your expenses. The rent price should cover at least your mortgage payment, property taxes, and insurance.
7 – Property’s Condition
Inspect the property for any structural issues or major repairs needed. Evaluate the age and condition of key components such as the roof, plumbing, electrical systems, and HVAC. If the property needs repair and maintenance work to make it rental-ready, assess if the other essential factors, such as location and potential rental price, would compensate for the extra expenses.
8 – Amenities and Features
The rental market is fiercely competitive, so you must do your best to make your property stand out while keeping the costs in check. Features such as laundry facilities, including Internet in the rental price, being pet friendly and having a flexible roommate policy are highly valued among tenants.
There are more features you can add to your rental property that have a high impact and don’t cost much. We have an article with our favourite ones to use as inspiration.
9 – Future Development
Investigate any planned developments or infrastructure projects in the neighbourhood that could impact the property value and rental demand. An area with a vibrant commercial life and constant opening of new businesses will always be attractive to tenants wanting to live close to their workplaces.
10 – Resale Potential
Consider the potential for property appreciation and ease of resale. Taking resale potential into consideration is a strategic approach to real estate investment that aligns with long-term financial goals and the peace of mind of having the flexibility to make a profit if you don’t want to be a landlord anymore.
Become a Landlord the Right Way
Finding the ideal investment property in Calgary can be lengthy, especially when the market is heated and competition is high. However, finding a property that meets these criteria is essential to making a good investment.
We always advise aspiring landlords to work with real estate experts, such as agents or property managers, to navigate the complexities of buying a property. If you want to become a landlord in the Calgary area, we’re happy to help.
