Where would you invest your money in Calgary?

[muse017]

1. Downtown Condo or apartment

2. Townhouses in Tuscany/Rocky rigde/Royal Oak

3. Acreage near the city limit(Bearspaw(nw)/Heritage point(s))


For option 1 and 2, most likely to get 2 units at once.
option 3, it'll be about 10 acres of land with house.

Where do you prefer? and why?

Capital? Let's just say $.5 million

[BigMass]

buy low sell high. Calgary would be the last place i'd look to invest in. I'd be more inclined to look into the depreciated housing marked in the US. Somewhere near the ocean.

[lint]

Originally posted by muse017

3. Acreage near the city limit(Bearspaw(nw)/Heritage point(s))


For option 1 and 2, most likely to get 2 units at once.
option 3, it'll be about 10 acres of land with house.

Where do you prefer? and why?

Capital? Let's just say $.5 million

You can you get an acreage with house in bearspaw for $500K????

[krisopotamus]

No where, I think Calgary is at a peak, it can't continue to grow much more. You will drive anyone who makes less than 100k out of the city.

[Shane1]

I too am looking to pick something up. I currently live in Tuscany and yea, prices are unreal...

I am looking for a condo... close to downtown or...?

what does everything think?

[turbotrip]

new houses in developing areas

[Akagi Redsuns]

Originally posted by BigMass
buy low sell high. Calgary would be the last place i'd look to invest in. I'd be more inclined to look into the depreciated housing marked in the US. Somewhere near the ocean.

My thoughts exactly.

[D. Dub]

Originally posted by krisopotamus
No where, I think Calgary is at a peak, it can't continue to grow much more. You will drive anyone who makes less than 100k out of the city.

I don't believe thats true. From many economist's viewpoints Calgary's real estate market has really just caught up to where it should have been earlier.

They are still predictng an overall steady yearly 5-10% lift -- ad infinitum. :dunno:

[Canmorite]

Calgary's downtown and beltline (lower mount royal) would be a good place to go. Tons of units available for rental purposes.

EDIT: It's a high demand area, too.

[HRD2PLZ]

I would put money into the downtown area. Downtown is the easiest to rent out and generally yields the highest return. As far as condo's go, its also generally the easiest to sell. Royal Oak/Rocky Ridge,etc are great area's too. But if your looking for investment purposes, I would stick to downtown or inner city.

[ken-gsr]

Ok, buying real estate down town and beltline is a great idea. But what happens when the 1 bedroom condo is $265,000 and you put down 10% ($26,500) your left with a mortgage of $238,500

Monthly expences
Mortgage - $1271.11 (Based on a 35 year Mortgage @ 5.5%)
Condo Fees - $250
Property Tax - $90
Insurance - $40
Total = $1651.11/month

Rent = $1200/month


You would be losing $451.11/per month on that investment (plus if you had to take out an additional loan for the down payment). I just dont understand how that investment would work. Could someone please help me out and make it make sense?

[max_boost]

^^^

It would work if that condo goes up by at least $10K/year and you have disposable cash to cover the difference.

[Tik-Tok]

Originally posted by lint


You can you get an acreage with house in bearspaw for $500K????

Nope.

Bare land is now $300g for 2 acres, WITH hardcore architectural controls... so I don't know who he'd be buying 10 acres with a house for $500g from.

[Tik-Tok]

Originally posted by ken-gsr
But what happens when the 1 bedroom condo is $265,000 and you put down 10% ($26,500) your left with a mortgage of $238,500

Total = $1651.11/month

Rent = $1200/month


You would be losing $451.11/per month on that investment (plus if you had to take out an additional loan for the down payment). I just dont understand how that investment would work. Could someone please help me out and make it make sense?

You need more than 10% to mortgage a rental property. I don't recal the #, something like 25-35%.

[ken-gsr]

Originally posted by Tik-Tok


You need more than 10% to mortgage a rental property. I don't recal the #, something like 25-35%.

Well that is besides the point. I mean you would still probably be taking out an inital loan to pay for the down payment.

And who has an extra $500 dollars of disposible income?! Plus if you had to do that to each one of your properties you are not going to be able to have that many.

Have any of you read the book 'Canadian guide to Real Estate investing'? It is a great book, but I still dont understand how you could do it right now.

[Euro838]

Originally posted by ken-gsr
Ok, buying real estate down town and beltline is a great idea. But what happens when the 1 bedroom condo is $265,000 and you put down 10% ($26,500) your left with a mortgage of $238,500

Monthly expences
Mortgage - $1271.11 (Based on a 35 year Mortgage @ 5.5%)
Condo Fees - $250
Property Tax - $90
Insurance - $40
Total = $1651.11/month

Rent = $1200/month


You would be losing $451.11/per month on that investment (plus if you had to take out an additional loan for the down payment). I just dont understand how that investment would work. Could someone please help me out and make it make sense?

That's why soon rents are going to be increasing significantly too! As the vacancy rate drops in the downtown, rents will increase to their sustainable levels. I believe 2 bedroom condos downtown now rent for $1800-$2500 so 1 bedrooms should be fetching close to $1500-$1800.

If the housing price continues to increase, the rental market will have to follow because of the fact landlords will not want to lose money and will have to increase enough so they can at least cover their monthly payments. You will not see crazy capital appreciation like in previous years but there's still potential in real estate investing in Calgary.

I think a lot of people want to see $50K-$100K gains in a short period. Well, those days are over for the most part.

[max_boost]

Most people who are in the rental market were in prior to the spike so they do not need to worry about a monthly cash deficit. And those who are actively looking for rental properties are smart enough to look for gems/undervalued properties.

;)

It is those who don't have a lot of money and want in on the action that don't really understand how it could work. Trust me, smart people make it work. :thumbsup:

[lint]

Originally posted by Tik-Tok


Nope.

Bare land is now $300g for 2 acres, WITH hardcore architectural controls... so I don't know who he'd be buying 10 acres with a house for $500g from.

My thoughts exactly. I can't remember any property in that area for under $800K. And I really think Bearspaw is an area to buy in to live, not to invest in.

[Tik-Tok]

Originally posted by ken-gsr


Well that is besides the point. I mean you would still probably be taking out an inital loan to pay for the down payment.


That's why you don't take out a loan to invest.. in anything. It's a dangerous road to travel.

Not many have $ to buy out a place, but they may have 25-35%

your own #'s with 30% down.

Monthly expences
Mortgage - $988 (Based on a 35 year Mortgage @ 5.5%)
Condo Fees - $250
Property Tax - None on condos, condo fees take care of it
Insurance - $40
Total = $1278/month

Rent = $1280/month

[lint]

Originally posted by Tik-Tok


That's why you don't take out a loan to invest.. in anything. It's a dangerous road to travel.


uhhhhhh....what do you call a mortgage?

[Canmorite]

Originally posted by Tik-Tok


That's why you don't take out a loan to invest.. in anything. It's a dangerous road to travel.

Not many have $ to buy out a place, but they may have 25-35%

your own #'s with 30% down.

Monthly expences
Mortgage - $988 (Based on a 35 year Mortgage @ 5.5%)
Condo Fees - $250
Property Tax - None on condos, condo fees take care of it
Insurance - $40
Total = $1278/month

Rent = $1280/month

Rent is higher then that for a 2 bedroom. I'm paying 1450 for a 2 bedroom downtown on 16th ave sw, and its an old building.

For a newer one 1550+ isn't unreasonable.

[ken-gsr]

Originally posted by Tik-Tok


That's why you don't take out a loan to invest.. in anything. It's a dangerous road to travel.

Not many have $ to buy out a place, but they may have 25-35%

your own #'s with 30% down.

Monthly expences
Mortgage - $988 (Based on a 35 year Mortgage @ 5.5%)
Condo Fees - $250
Property Tax - None on condos, condo fees take care of it
Insurance - $40
Total = $1278/month

Rent = $1280/month

Actually you do have to pay for property taxes for condos. I own one in Mckenzie towne and my girl friend owns one in Lower Mount Royal and we both pay condo fees and property taxes.

Your plan is great if you plan on only having one rental property, but I am not - I want to have many rental properties and if you think you need to have $35000 each time you want to buy a rental property then you are crazy! That is why you take out a loan (personal line of credit).

And what are you talking about. 'A loan is a dangerous path to travel'? If you lose the money you’re still going to be losing either your money or the money your borrowing. At least if you take out a loan for the investment you should hopefully be making a greater return on the investment then the interest you will be owing on the loan.

I guess you won’t be doing any 'smart' investing anytime soon lol

[muse017]

I was just saying $500,000 because it'll be the minimum amount of cash we are going to put down. If we are going to invest on the acreage(Like option 3), then we need more than 1.4 million(800,000 cash + 600,000 mortgage). There won't be any return for at least 5yrs.
Is it worth to invest 800,000 + cash or should we just forget about it and buy 2~3 premium condos in downtown core without any mortgage. A lot of people around my father said good stories about acreage and it'll be worth twice or triple wihin a couple years or so. :hitit:

[Canmorite]

Originally posted by muse017
I was just saying $500,000 because it'll be the minimum amount of cash we are going to put down. If we are going to invest on the acreage(Like option 3), then we need more than 1.4 million(800,000 cash + 600,000 mortgage). There won't be any return for at least 5yrs.
Is it worth to invest 800,000 + cash or should we just forget about it and buy 2~3 premium condos in downtown core without any mortgage. A lot of people around my father said good stories about acreage and it'll be worth twice or triple wihin a couple years or so. :hitit:

If you think the market is going to continue upwards, put as little down as possible.

This way other money can be invested elsewhere, and if the market continues upwards and you sell the property at a gain, those gains wipe out interest paid on the mortgage payments.

Correct me if I'm wrong? :dunno:

[ken-gsr]

Yeah that’s right. If you have that kind of cash - why would you buy 3 condos out right? I would put the minimum down on 15 of them. You will be making minimal passive income off of the properties but they will be all gaining equity. You have to look at the big picture as appose to what is happening right now (equity off of all rental units as apposed to the current passive income you will make). If you are looking for a long term investment (which you would have to do) Then the more investments in your portfolio the better! :thumbsup:

[tentacles]

The whole point of investing in real estate is leverage - It's the only way a small investor can get leverage cheaply. With any kind of investing, it's better to be lucky than good, and with leverage, when you get lucky, you get REALLY lucky. Of course it works the other way too but I guess the worst you can do is bankrupcy. The bank can't break your kneecaps.

That what happens with real estate booms, look at the US example. When things take off, every schmuck who bought some shitty house in 1996 because it was cheaper to buy than rent suddenly becomes a "real estate investor" and are experts at using leverage.

Did they really understand back in 96 that they were buying, with likely a huge amount of leverage, a highly illiquid asset, with value closely correlated to their own ability to service their debt(i.e. local economy goes to shit, you lose your job AND your house is worth nothing, great way to diversify your retirement) and whose historical growth rates have barely been able to match inflation, only because housing costs actually compose a big percentage of the CPI, in an area where real estate values are tied soley to the movement of a single volatile commodity?

Maybe, but I'm going to bet a lot of them were just plain lucky. :rofl:

Not that people shouldn't buy houses, just that they should buy them to LIVE in. Like cars, at the end of it all it doesn't matter much how much you made/lost, if you feel great sitting inside. That's my idea of a "safe" investment. :)

[B20EF]

Originally posted by Tik-Tok
Property Tax - None on condos, condo fees take care of it

Maybe in some condos, but I pay property tax for mine.

[Dayclone]

Well I'd rather invest in a a new house... like build one because for the same price as a house or alittle more you could get a single family house with no garage or a de-attached garage for an extra 50K I believe, and wala! you have yourself a single family house which could be rented to a family or split up basement and upstairs etc... it's a great investment, and plus you'll get the square footage you want.

Steve

[lint]

Originally posted by Dayclone
Well I'd rather invest in a a new house... like build one because for the same price as a house or alittle more you could get a single family house with no garage or a de-attached garage for an extra 50K I believe, and wala! you have yourself a single family house which could be rented to a family or split up basement and upstairs etc... it's a great investment, and plus you'll get the square footage you want.

Steve

You're neglecting one of the most important variables when dealing with real estate, namely location.

And why would you build a new house, fully develop the basement just to rent it out? That's a lot of effort and time and money for something you're not even going to live in.

[googe]

Originally posted by Tik-Tok


That's why you don't take out a loan to invest.. in anything. It's a dangerous road to travel.

Not many have $ to buy out a place, but they may have 25-35%

your own #'s with 30% down.

Monthly expences
Mortgage - $988 (Based on a 35 year Mortgage @ 5.5%)
Condo Fees - $250
Property Tax - None on condos, condo fees take care of it
Insurance - $40
Total = $1278/month

Rent = $1280/month

you should stop giving advice.

dont take out a loan to invest? donald trump is laughing at that joke all the way to the bank, literally. every wealthy person in the world that didnt get a hand-me-down got their fortune by using borrowed money, guaranteed. the math doesnt work otherwise.

and no, condo fees do not cover property tax, did you just dream that up?

[ken-gsr]

^^^^
Werd, finally somebody on the same page as me.

[riceboi]

Originally posted by ken-gsr


Actually you do have to pay for property taxes for condos. I own one in Mckenzie towne and my girl friend owns one in Lower Mount Royal and we both pay condo fees and property taxes.

Your plan is great if you plan on only having one rental property, but I am not - I want to have many rental properties and if you think you need to have $35000 each time you want to buy a rental property then you are crazy! That is why you take out a loan (personal line of credit).

And what are you talking about. 'A loan is a dangerous path to travel'? If you lose the money you’re still going to be losing either your money or the money your borrowing. At least if you take out a loan for the investment you should hopefully be making a greater return on the investment then the interest you will be owing on the loan.

I guess you won’t be doing any 'smart' investing anytime soon lol

Ken I agree with your logic above, but I'm puzzled by your comment " I want to have many rental properties and if you think you need to have $35000 each time you want to buy a rental property then you are crazy! " ...How do you buy property without down payments? You only have so much in your borrowing room, the banks do check your outstanding loans before considering your situation.

[Canmorite]

You don't have to put down 25% each time you want to buy a property. You can put as little as nothing down, but the fees are much higher (CMHC, etc.).

The advantages of doing 25% down are:

- Avoiding CMHC mortgage insurance premiums, which can be up to 4.25% of the mortgage value
- Less mortgage to pay back
- Lower monthly payments
- Larger downpayment means less money borrowed means better protection in the event of interest rate fluctuation

Amortize it over 35 years because in this fast moving market, the most important thing is ownership and taking advantage of the fast capital appreciation.

[Maddog55]

Muse...*chuckle*...seems kind of funny that you would be asking for serious financial advice from a forum that includes suggestions of "never borrow to invest" and "you should buy a new house". both the most absolute worst advice lol. The first principle in investing and making money is OPM...."other peoples money" If you're a serious investor you'll know what I mean. Why not just talk to a financial adviser. Im sure he'll give you tips on "sheltering" your money as well the best return.


Here is an example of "OPM". My father had enough money to pay out his mortgage and sit mortgage free. sounds perfect right? His financial advisor told him to: Pay out the mortgage...re-borrow the very same amount and invest it in a tax shelter. That way his payments are the same..except now he can write off the payments as well as earning 5% over and above the interest on the loan...not to mention he now has a "principal" thats growing.

I bought a crap house in Pennbrooke last year for $240k. Have two renters in it (up/down) $1400+800. my payments are 1300 plus 100 for taxes. Im making $800 per month and now the house is worth $325k

[ken-gsr]

Well calgary dave, not only are you crime stopper, but you are a very smart man.

so to answer your question riceboi, look at Maddog55's answer.

I dont understand how you guys plan on getting rich if you keep saying stuff like 'dont borrow money to make money' so what you save up $30000 over the course of what... 10 years. If you were smart and borrowed that $30000 or had an OPM - in ten years you would have hopefully made so much that paying it off would seem like nothing.