For many Albertans, becoming a landlord is a lifelong dream. When done properly, this is a type of investment that pulls in passive income while building your portfolio and allowing you to meet your financial goals sooner than you ever could with your nine to five job. If you’ve been dreaming about sipping Mai Tai’s on the beach more often or finally going back to school, owning an investment property could get you there. But before you book your plane ticket, you’ve got to start somewhere. First things first, you must find the perfect property. Here’s how to do it.
Hire a Qualified Realtor
Purchasing a home for rent is a little different than buying one for you and your family. There are certain considerations you may not have thought about along the way if you approach the buying process from a singular perspective. Choose to work with a real estate agent who has had extensive experience buying and selling investment properties. They will be able to provide the knowledge you need to make an informed buying decision.
Narrow Down Your Target Features
Are you looking for a single-family home or a multiplex? Are you looking to rent to students, families or seniors? Getting a good idea of what you want will help you narrow down your options. For example, purchasing property near a university will often attract adult students, whereas a home near an elementary school will typically draw in younger families. When looking at neighbourhoods, consider crime rate, proximity to schools, the local job market, and all the amenities the area has to offer. You want to find the balance between an affordable initial investment and a place that people will want to live.
Perform Investment Property Analysis
When you have narrowed down your scope to your top two or three options, it’s time to crunch some numbers. First off, look at your current finances. How much of a mortgage can you afford? How much will you put down? Then take a look at the property itself. Approximately how much will you need to spend on renovations and upgrades to get the place to a rentable state? How difficult and costly will the upkeep be? You should have a fairly good idea about how much money you will be putting into the home before you get anything out of it. If the worst should occur and you struggle to find renters over a long period of time, will you be able to afford this mortgage? Then finally, examine how much you could potentially make off of the property through renters. What is the rate of rent in the area? Is this a hot spot for tenants? Make sure to take all of these factors into consideration, too.
Purchasing an investment property can be one of the most rewarding moves you make in your financial career. Just be sure to choose the right one. If you’re looking for a place in Calgary, our team at GIL can help! Not only do we offer property management, but real estate services as well. Contact us today to get started.