Much of the residential real estate industry can be divided into two camps: homes for the owner to live in and homes for the owner to invest in. As a buyer, your purchasing journey will look different depending on which of these objectives you are seeking. Because of this, it’s important to ensure that you tailor your professional team to meet your specific goals. You wouldn’t work with a Harley Davidson salesperson if you’re in the market for a Mercedes. Real estate is the same way. When it comes to rental investments, you want a realtor with experience in property management.
In-Depth Understanding of Rental Codes
We’ve had numerous accounts of brand-new owners presenting us with a newly purchased “4-bedroom” rental, only to find out that under rental standards it only qualifies as a 3-bedroom unit. This could be due to something as simple as the fire code not being met on basement windows. Miscommunications like this can end up costing you thousands in lost revenue, unexpected renovations, and even legal fines. Alberta building codes and standards dictate what qualifications a unit must meet in order to qualify as a legal rental. A specialized real estate agent will be fully aware of the quirks that come along with rental codes and keep you informed during your search.
Applicable Market Knowledge
If you are purchasing a home for yourself, you’ll want to know about the neighbourhood, amenities, and other market factors that will directly impact your family. With a successful investment property, you will need to know all of that and more.
- Is this a growing community? Are there future developments planned for the area?
- What is the average cost of rent in this neighbourhood?
- What is the demographic of people living here? For example, students, young families, seniors, etc.
Exclusively family home realtors do not have the market knowledge to answer these questions accurately. It is not uncommon we come across owners who are ill-advised that a property will fetch $2000 per month when the actual going price in the area is closer to $1600. That’s a $400 unexpected drop per month and a whopping $4800 a year!
The expertise of Legal & Tax Implications
In addition to building code, there are other responsibilities a landlord must uphold. These are both to the resident and to the government. While a Property Management team can help with your tenant duties, an experienced realtor can help you navigate the legal and tax implications involved with owning a rental property. One thing that often takes our clients by surprise is that non-resident buyers will have to pay 25% tax on their monthly rental income. That massive chunk can be staggering to those who are not expecting it. Knowing what you’re getting into in terms of responsibilities can help you make a more informed decision before you lock yourself into a losing investment.
The incentive to Build Healthy Relationships
This last point is vital to investors looking to build their real estate portfolio past a single property. You may only need a family home real estate agent once every five to ten years at most. If you’re an ambitious owner who wants to reap the benefits of multiple properties, you’ll be working with your realtor much more often. The more specialized and knowledgeable they are, the more both of you benefit. You’ll be able to make better buying decisions, resulting in greater profits, and the ability to keep investing back into real estate. This incentivizes the realtor to maintain a healthy working knowledge of the rental market because the more successful you are, the more successful they are.
It can be easy for buyers to assume they can use the same real estate agent from the purchase of their family home as for an investment property. From the above points, it’s clear to see that it couldn’t be further from the truth! If you are making a serious investment, you should work with a Property Management professional who has an in-depth understanding of rental codes, applicable market knowledge, extensive legal and tax insight, and the incentive to build a healthy, long-lasting relationship with you, their client. For experts in the Calgary renter’s market, reach out to our team of realtors at GIL Property Management today and get started!