Landlord / Rental /Investment properties advice

[90_Shelby]

Yes in Calgary and I have done no comparisons or further math on alternative investments. Like most, we lived in it for a few years and simply kept it when moving on. If someone wanted to do a deep dive, i’ll Pm the numbers, and like the interior of my Jeep, i’m open to comments and criticism.

[Xtrema]

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I know everyone kind of likes to dump on rental real-estate as an investment class but aren't most of the issues stuck on A) lack of appreciation of value and B) condos? Compared to the bizarre year over year increases in GVA & GTA, Calgary has lagged for many years but is owning a single family detached house in a good neighbourhood still a viable option?

Property taxes are going up. Property value isn't. Rent stayed flat or lowered. Return is horrible. If you are looking at condo/townhouses, management/insurance costs are going up as well.

And there are so many new hoods still pumping out $350-$500K houses.

So stay away unless you worry about stock market going thru another huge crash. I don't see any drive for AB properties to rise other than typical inflation rate.

[Power_Of_Rotary]

I dont think Calgary is an ideal city for any kind of investment. However, real estate has not really taken much of a toll on a long term view. Real estate investment is a long term investment. Only ridiculous cities, like vancouver/hk, can turn a profit in a matter of months. This is heavily driven by dirty money and mainlander Chinese.

Cities like Calgary, Id say, is more stable with less foreign influence. However, Calgary is DEEMED susceptible to oil value which I somewhat disagree. Real estate value has not moved in alignment with oil value. If it has, calgary real estate today should be worth 30-40% of 2008.

Ive been considering relocating back to calgary in the near future and looking at houses. I am fucking shocked at how expensive houses are still. I dont see renting as a better alternative in the long run. Inflation has helped the global real estate. And Covid has boosted inflation (up for debate, but this is what I am seeing).

[Buster]

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I’ve had a rental property which I bought ~10 years ago, it’s a simple 50’s bungalow with a suited basement and it’s zoned RC-2. If I sold it tomorrow, i’m up 50% from when I bought it and it brings in ~$2400/month between the house and garage. I have no complaints and I wish I had multiples of this property.

Pre furnished?

[Xtrema]

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Pre furnished?

I assume 2 tenants (upper + lower) and garage at separate rate.

[SJW]

I just sold my rental house after 12 years of renting. Confirmed headache. I will enjoy my new simplified life by investing in REIT and gold or lougle.

[Disoblige]

I'm not a landlord by choice, but only due to economic situation. I'm in it for the long game now. Let's see what happens in 10-15 years...

[tonytiger55]

Blimey...what did I open up with this thread. lol

Im sure rentals has its issues. Im also trying to look at it from the perspective of immigrants, particularly in the east Indian community. My parents in the UK had a rental. They bought in a bad time. It paid off in the long term.
Here its some of the same issue, some of the immigrants don't know investments or the S&P 500. What they do know is brick and mortar. I know people who just buy a second property and let the tenants pay off the mortgage. Not so much of the property gaining value, but more a place to park money for the long term and the leverage it gives.
Im curious how they are doing it.

I get property has not gained in value. But having it balance with money being so cheap to borrow, has it really decreased that much?
Would you do it all again, or just invest in the S&P 500?

[msommers]

Less to worry about if you just throw it in VOO. Rentals would be less of a headache if they were responsible people looking to stay long-term. My experience is that those people are few and far between, and tend to buy than rent. Maybe with your EI ties this may be different and certainly an advantage of you know someone from the community/church etc already than a random on Kijiji or Rentfaster.

[ExtraSlow]

Owning property is totally part of the immigrant dream, and if that "makes more sense" to someone than index funds, I guess that's fine. I just think when you own property, you tend to underestimate how much time and effort you put into it over the years. I think a cold review of the numbers makes owning rental property less profitable than some other options, but the heart wants what the heart wants.

I don't own a 2nd property, and I realize in hindsight I got pretty lucky with my primary residence over the years, so I don't think I could count on that again. I also hate the idea of buying more hassles. But that's a personal thing. Some folks love to tinker and fix.

[A790]

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Blimey...what did I open up with this thread. lol

Im sure rentals has its issues. Im also trying to look at it from the perspective of immigrants, particularly in the east Indian community. My parents in the UK had a rental. They bought in a bad time. It paid off in the long term.
Here its some of the same issue, some of the immigrants don't know investments or the S&P 500. What they do know is brick and mortar. I know people who just buy a second property and let the tenants pay off the mortgage. Not so much of the property gaining value, but more a place to park money for the long term and the leverage it gives.
Im curious how they are doing it.

I get property has not gained in value. But having it balance with money being so cheap to borrow, has it really decreased that much?
Would you do it all again, or just invest in the S&P 500?

I own two properties in Calgary: a half-duplex in New Brighton and 10 acres just outside of Chestermere. I just spent $13k to replace the roof at the acreage and it's looking like the furnace is going to be next. That'll be $8k or so.

Oh, and I also have to pay income taxes on the principle that is being paid down by the tenants despite the property being cashflow negative. That's always awesome.

In total, I'm into each property for a combined down payment of around $150k and five years of front-loaded interest payments in the mortgages on both.

Now, you can't predict the future when investing. That much is pretty well understood. However, if I had invested that $150k in the market in 2015 instead of purchase these properties, I'd have seen an annual ROR of around 11.2% (dividends reinvested). My half-duplex is down about 30k in value, and the acreage is flat.

Conversely, my $150k on the S&P would have turned into around $255k given the past five years of performance.

Now, secondary to that: without some kind of economic miracle, Calgary is more or less destined for stagnant growth due to lowered demand for our primary export.

Calgary is a great city in many respects, but it's not a place where I'd be investing again anytime soon.

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[Xtrema]

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I get property has not gained in value. But having it balance with money being so cheap to borrow, has it really decreased that much?
Would you do it all again, or just invest in the S&P 500?

Detached houses ($400K-$500K) has held firm in prices but everything else has about 2-8% drop from Aug 2019-2020.

When not counting on prop value increasing, return on rental is about 3-4% without incidents regardless if you have a mortgage or if it's paid off and there is effort from you to manage and earn that. And 1-2 months of skipped rent/vacancy could wipe that out easily

Given my history started well before 2007, I'm ok with it from the work vs reward. But last 10 years has been very lack luster for returns and given Calgary's performance from last 10 years and outlook for the next 10, I won't do it again, and interest rate was like 3x higher when I started in early 2000s.

[vengie]

I would agree with much of the sentiment here that Calgary would be a bad place to invest in real estate.

I also had a rental at one point and while I was fortunate to find good tenants each time, it was certainly a headache.
Not to mention with our city council dream of population density at the core, having 15 new condo buildings popping up at any given time is not conducive to your property value.

Our condo market is WAY over saturated.