The real estate market in Calgary right now is hot. Very, very hot. For the first time in what feels like years, properties are not only selling quickly but are selling for more than asking price. According to the Calgary Real Estate Board, there were a record-high 3305 sales in February of this year with prices up 16.1% year-over-year.
There are a number of reasons behind this, including rebounding oil prices, buyers leaving the Toronto and Vancouver real estate markets, pent-up desire to move after the pandemic, and more. The long and the short of it is this: There is a lot of confidence both in the Calgary market and in the city as a whole.
If you live in Calgary, this is nothing but good news. Calgarians know the value of this city and understand that it’s more than just an oil and gas hub; it’s an incredible place to raise a family with the promise of prosperity. It’s a sign the world is just waking up to all that the city has to offer. In any event, the time has never been better to invest in real estate in this city.
Still a Good Time to Buy
The adage about trees is the best time to have planted one was twenty years ago. The second best time is now. In real estate investing, it is easy to look and say, “I wish I had bought a property last year or two years ago,” but now is still a great time to buy.
Calgary’s real estate has been relatively stagnant since about 2015, when oil prices dropped dramatically. Growth in the apartment sector compounded the problem, as projects that were approved years ago now flooded onto the market at reduced prices.
While we are seeing the detached and townhouse markets leading the market, apartments have also begun to see growth. On the rental side, at Amhurst, we’re seeing a stark rise in rental rates. Tenants are taking sharper increases (in the 5-7% range) in monthly rents, while properties that are coming vacant are renting quicker and for more money than previously expected.
We’re even seeing individuals trying to outbid one another for a rental property and offering to pay more months of rent in advance to strengthen their applications.
However, this trend has not been across the board, and one key factor separates the properties that rent quickly from the ones that don’t.
Properties That Look Good Rent Well
People like nice things. They want to live in a property they not only feel comfortable in but one where they feel proud to call home. When tenants feel like the place that they rent is home, they take better care of it, are more likely to renew their lease, and are more likely to take a gentle increase in the rent year after year.
For investors, this means doing the little things right, or ensuring your property manager does. Starting from the front door, making sure the exterior looks good sets a positive first impression for tenants. In the winter, having a shovelled walk and an entrance mat at the front door to minimize mud marks at the door goes a long way to helping tenants feel like it is a place they want to call their own.
On the inside, you don’t need to spend tens of thousands of dollars rebuilding a kitchen, but ensuring the walls are free of blemishes, the place is spotless, and the home smells nice makes an incredible difference for tenants.
Doing the little things right not only brings in better tenants, but also reduces vacancy, and leads to a greater ROI. At the end of the day, if you can put a few more dollars in your pocket from your investment in the short term, it is nothing but good for you and your family.
Calgary Real Estate is a Long Term Play
While the allure of speculation is always there, our clients have had far greater success with a buy-and-hold strategy. This success starts with buying the right property with the right advice, knowing from a professional what a realistic market rent for an investment property is. There are few worse things in real estate investments than expecting the rent to be one thing and then not reaching it.
From there, it all comes down to management. Whether you do it yourself or hire a professional property manager, managing your tenants and your investment prudently can make the difference between making money and losing money in both the short and long term.
The opportunities are plentiful in the Calgary market, and the city is primed for growth. If you have already invested in the real estate market in Calgary, great! We expect your investment will continue to grow as the market develops. Now is a great time to explore investing in this city, as the time is right to jump in.
