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    Default Calgary real estate prospects

    After reading comments from you guys in the landlord/real estate investment thread, I am wondering what the long term prospects are for Calgary Real estate. Many of you have said it is not worth investing in Calgary and the value is dropping. I am interested in buying a house in Calgary for when and if I decide to relocate back. Even though most of your are grim on the real estate, the housing value in Calgary is still high in my books. Average decent/newer house is still well over 600k and old houses with the bigger lots are still around 500k (ie. charleswood, huntignton hills etc.).

    My preference would be to have a place with lots similar to Huntington Hill (I lived there when I was young). Reason is the lot size and the alley access for cars/garage. I would like to turn the backyard into a concrete yard such that I can park cars/trucks/trailers etc. I remember my family sold my grandparents home for less than 200k a millennia ago. While today, these houses are going for 400-600k. Given the age of the physical house, the key value is the lot itself. However, the location itself is not amazing. Perhaps buying a place outside Calgary like Chestemere would meet my requirements while getting a newer house?

    Even after so many years of "recession", I fail to see this reflected in the real estate market. Globally, almost all cities (especially big cities), RE have continued to soar to record highs. Hell, RE in many Asian countries are hitting all time highs with double digit growths - THIS QUARTER.

    I understand being a landlord is shit. The return may be a wash given the maintenance and repairs and headache. But in the long run, housing value continues to go up and affordability seems to diminish. Also, if I decide to move in I would not have to worry about inflated real estate (mainly land value). What are your views?
    Last edited by Power_Of_Rotary; 10-05-2020 at 09:29 PM.
    Originally posted by beyond_ban
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    Don’t look at it as an investment and buy what you can afford. I jumped in hoping my house matches inflation in 20 years, and make other investments that will make a good return. I wouldn’t count on real estate always going up, my neighbour’s are on year 3 of trying to sell their place in hillhurst, paid $940K for it in 2009, put in $250k in upgrades and are struggling to get $750k. Until calgary gets some kind of industry recovery, real estate won’t see massive gains, but real estate is also incredibly sticky with pricing so don’t expect any crazy discounts unless you are $1m+, most people refuse to eat the loss because of the “real estate always goes up” mindset.
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    For your primary residence, I think the decision is much simpler than buying RE as an investment.
    Buy what you can afford, in a neighborhood you like, pay it down over time, enjoy life.

    I like HH too. My mom lives up there as well as one of my favourite beyond members. Nicely liveable area, good access in every direction.
    Let's all work on positivity this week.

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    I think a house is still a good investment even with stagnant real estate prices. Looking on rent faster many homes are still renting (2,000-2,200 per month) for around what it would cost for mortgage (1450)+taxes (200)+insurance(150)+tiny bit of profit give or take (assuming 20% down, 450k place).

    You'd have to commit 88k up front and receive 12k/year in equity returns. 13.6% return isn't too shabby though maintenance and tenant issues come out of that. Assuming you can find stable tenants it's still a good investment in the long run if you stay away from condos and find something of good value
    Nolan

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    It might go up, it might not go up.

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    Single title 4-Plex, that might be a worthwhile investment. Still falls under a residential loan with most big banks, sub 2% money and 4 units for under $700k? Could be worthwhile

    Single family detached, that one day you want to live in? Yeah... better be all land value. Couple deals have popped up in some nice areas which would be a good hold as the higher end has dropped pretty substantially. But you have to budget for either an infill or almost a full gut before moving in. Also the tax implications have to be factored in here as it would have been an investment property prior to primary residence

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    I just sold my rental. Got out while the gettins good. My tenant wasn't paying rent the last few months but he was in there 12 years so i cut him some slack. Took 1 week to sell. Got more than I thought I was going to get. Nice to have that stress behind me. I'd rather invest in the market at this point.

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    The best residential investment asset class is certainly multi-family. One building generating multiple revenue streams from different tenants is an easy way to consolidate costs combined with maximizing rent per SF. The big issue there is that with all the new institutional purpose built rentals popping up around town, there has been a flight a quality which has kept rental growth stagnant within this class, and in some cases has caused it to regress. 4, 8 or 12 plexes are best in my opinion, but make sure to buy one with concrete bones and that doesn't require too much capex within the first 5-10 years.

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    Quote Originally Posted by ercchry View Post
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    Single title 4-Plex, that might be a worthwhile investment. Still falls under a residential loan with most big banks, sub 2% money and 4 units for under $700k? Could be worthwhile

    Single family detached, that one day you want to live in? Yeah... better be all land value. Couple deals have popped up in some nice areas which would be a good hold as the higher end has dropped pretty substantially. But you have to budget for either an infill or almost a full gut before moving in. Also the tax implications have to be factored in here as it would have been an investment property prior to primary residence
    4-plex for 700k? Sounds like a dump barely holding together.

    If you can get something in good structural shape for that then that'd be a steal. Works out well that eventually you can reno it one unit at a time and maintain 75% rental income. But idk where you'd find a 4-plex for that in the city.
    Nolan

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    You should not conflate buying a primary residence with an investment property.

    You need a place to live, so you can either decide to rent or buy. If you're looking to "relocate back", I would put a lot of thought into the time frame you're looking at when evaluating that choice. If this is potentially a short(er) term move, whether because of professional uncertainty or future lifestyle changes (family, kids, etc), from a strictly financial perspective, I'd seriously consider renting until your future becomes more certain. The current RE market just seems too uncertain to make a short term play worth while; you need to factor in value (likely flat at best, if it doesn't decline), property taxes that are sure to see a significant rise and transactional costs (those sweet Realtor® commissions don't pay themselves).

    Of course, if the next, say, ten years or so of your life are pretty certain, the intangible benefits of owning your home - regardless of market performance - becomes a huge factor and (IMO) tips the scale in favour of owning, so you can then do what you want, when you want, etc.

    Personally, I wouldn't want to be "dipping my toe into" Calgary RE... If that's the case, rent. If you're ready to cannonball up in this place, go ahead and buy. GL.

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    One thing that also often gets overlooked is the quality of the place for buying vs renting. Lots of houses for sale are newly renovated and very clean and although there are a few rentals like that, most are much more dated with a lot more wear and tear because of renting. Often times buying will get you a nicer place.
    Nolan

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    Quote Originally Posted by pheoxs View Post
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    One thing that also often gets overlooked is the quality of the place for buying vs renting. Lots of houses for sale are newly renovated and very clean and although there are a few rentals like that, most are much more dated with a lot more wear and tear because of renting. Often times buying will get you a nicer place.
    Good call. Important to compare apples to apples. on the flip side, if you are buying, and you don't mind doing some work yourself, buying a run-down shithole can be a smart financial move.
    Let's all work on positivity this week.

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    Quote Originally Posted by pheoxs View Post
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    4-plex for 700k? Sounds like a dump barely holding together.

    If you can get something in good structural shape for that then that'd be a steal. Works out well that eventually you can reno it one unit at a time and maintain 75% rental income. But idk where you'd find a 4-plex for that in the city.
    They happen... currently a couple south calgary/mardaloop ones listed in the $700s... offer less... then during inspection note anything that needs attention after close, offer less again (get them to cover half the repair costs) ...then yes, update unit by unit increasing rent... hopefully don’t touch it for a decade or so, then you have a prime build lot to put up anything you wish... and $700s for a 50ft+ frontage, R2 lot is a gud deal even if you have to do a little work

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    Quote Originally Posted by finboy View Post
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    Don’t look at it as an investment and buy what you can afford. I jumped in hoping my house matches inflation in 20 years, and make other investments that will make a good return. I wouldn’t count on real estate always going up, my neighbour’s are on year 3 of trying to sell their place in hillhurst, paid $940K for it in 2009, put in $250k in upgrades and are struggling to get $750k. Until calgary gets some kind of industry recovery, real estate won’t see massive gains, but real estate is also incredibly sticky with pricing so don’t expect any crazy discounts unless you are $1m+, most people refuse to eat the loss because of the “real estate always goes up” mindset.
    I think I saw this house two weeks ago, number 2016? I loved it, but just not kid friendly. City views, cool layout, lots of space, quiet street.

    Great thread btw... I am also trying to navigate this. Frankly, in Calgary, with negative net migration projected over the next 3-5 years, and continued building, how is it possible for current property values to continue on? Sure, you have some 'stickiness' from people who have some generational wealth and can ride it out, but overall, there is nothing positive in the horizon for Calgary economically.

    I like the idea of owning, but I am more inclined to rent at this point. That said, my SO is pretty set on buying, and I am trying to steer her away from the insta-nice houses which have been built for a flip.
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    Quote Originally Posted by ercchry View Post
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    Single title 4-Plex, that might be a worthwhile investment. Still falls under a residential loan with most big banks, sub 2% money and 4 units for under $700k? Could be worthwhile
    Agreed on this lol must be multi units or no thanks.

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    Quote Originally Posted by you&me View Post
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    You should not conflate buying a primary residence with an investment property.

    You need a place to live, so you can either decide to rent or buy. If you're looking to "relocate back", I would put a lot of thought into the time frame you're looking at when evaluating that choice. If this is potentially a short(er) term move, whether because of professional uncertainty or future lifestyle changes (family, kids, etc), from a strictly financial perspective, I'd seriously consider renting until your future becomes more certain. The current RE market just seems too uncertain to make a short term play worth while; you need to factor in value (likely flat at best, if it doesn't decline), property taxes that are sure to see a significant rise and transactional costs (those sweet Realtor® commissions don't pay themselves).

    Of course, if the next, say, ten years or so of your life are pretty certain, the intangible benefits of owning your home - regardless of market performance - becomes a huge factor and (IMO) tips the scale in favour of owning, so you can then do what you want, when you want, etc.

    Personally, I wouldn't want to be "dipping my toe into" Calgary RE... If that's the case, rent. If you're ready to cannonball up in this place, go ahead and buy. GL.
    I dont think there are certainties in life, hence, we gotta make rational and reasonable decisions. Such as buying a principle property that may not be used for until much later down the road. That said, I do agree I need more clarity before making a major commitment.

    For the 4-plex idea, this might be doable. I can ultimately keep one unit vacant (unmolested) for myself and rent out the other 3 units. But then I can imagine what type of demographics are interested in a renting a unit out of a 4plex... yikes.
    Last edited by Power_Of_Rotary; 10-06-2020 at 07:45 PM.
    Originally posted by beyond_ban
    Yo Kanye, ima let you finish, but 50 Cent had the best concert cancellation of all time.

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    Quote Originally Posted by Neil4Speed View Post
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    I think I saw this house two weeks ago, number 2016? I loved it, but just not kid friendly. City views, cool layout, lots of space, quiet street.

    Great thread btw... I am also trying to navigate this. Frankly, in Calgary, with negative net migration projected over the next 3-5 years, and continued building, how is it possible for current property values to continue on? Sure, you have some 'stickiness' from people who have some generational wealth and can ride it out, but overall, there is nothing positive in the horizon for Calgary economically.

    I like the idea of owning, but I am more inclined to rent at this point. That said, my SO is pretty set on buying, and I am trying to steer her away from the insta-nice houses which have been built for a flip.
    Yea that’s the one, it would work if you had older kids but my buddy passed on it for the same reason, kids would be on a different level from the parents. We have 3 dogs and 2 cats now so renting just had too much risk associated in trying to find a place that would allow that many animals.

    That said, 2021 will be interesting with no more mortgage deferrals, no big upswing on the horizon for Alberta, and boomers making their exit to bc. If you are planning to stick around for more than a decade you can get a lot more house per dollar.
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    You're definitely right that there are no certainties in life!

    As you said, the best you can do is make a rational decision based on the plans that you do have. It's a difficult balancing act to buy a property that's future-proofed (against whatever you think that future might be). My point is, today, in Calgary, I would hesitate to buy a place unless I could reasonably think of it suiting my lifestyle for at least the next 5 (if not 10) years. At that point, the intangibles carry enough weight to balance or offset the financial uncertainty (IMO). If there's a high degree of uncertainty (contract work; currently single, but looking to mingle), I'd think long and hard about an alternative to buying in Calgary.

    Regarding the 4-plex idea - WTH? In the OP, you talk about wanting space for trucks and trailers, and acknowledge the idea that being a landlord in Calgary these days is "shit" and now you want to combine the worst of both those worlds - a smaller home, likely with little to no spare parking, all well becoming a landlord x3?

    As far as the recession not having an effect on Calgary RE - most of the Calgary market, at best, has been flat for the last decade; the high end market is probably down 20-30% (even more at the highest end). That's just gross housing prices, not including property taxes & RE fees. And fuck, nevermind opportunity costs, which cannot be discounted seeing as we're on the tail end of the biggest bull run in history. Nearly every comparable market through Canada (and jeez, most of the developed world) has seen unprecedented price appreciation in their RE and Calgary's... been flat. Hey, I guess it could be worse.

    Anyways, I really don't mean to piss on your parade. I would genuinely feel bad for anyone going into a ~$600k RE purchase today without their eyes being wide fucking open, only to have to sell in a couple years and have it cost them something crazy like $100 grand. GL with whatever you decide.

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    Quote Originally Posted by you&me View Post
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    You're definitely right that there are no certainties in life!

    As you said, the best you can do is make a rational decision based on the plans that you do have. It's a difficult balancing act to buy a property that's future-proofed (against whatever you think that future might be). My point is, today, in Calgary, I would hesitate to buy a place unless I could reasonably think of it suiting my lifestyle for at least the next 5 (if not 10) years. At that point, the intangibles carry enough weight to balance or offset the financial uncertainty (IMO). If there's a high degree of uncertainty (contract work; currently single, but looking to mingle), I'd think long and hard about an alternative to buying in Calgary.

    Regarding the 4-plex idea - WTH? In the OP, you talk about wanting space for trucks and trailers, and acknowledge the idea that being a landlord in Calgary these days is "shit" and now you want to combine the worst of both those worlds - a smaller home, likely with little to no spare parking, all well becoming a landlord x3?

    As far as the recession not having an effect on Calgary RE - most of the Calgary market, at best, has been flat for the last decade; the high end market is probably down 20-30% (even more at the highest end). That's just gross housing prices, not including property taxes & RE fees. And fuck, nevermind opportunity costs, which cannot be discounted seeing as we're on the tail end of the biggest bull run in history. Nearly every comparable market through Canada (and jeez, most of the developed world) has seen unprecedented price appreciation in their RE and Calgary's... been flat. Hey, I guess it could be worse.

    Anyways, I really don't mean to piss on your parade. I would genuinely feel bad for anyone going into a ~$600k RE purchase today without their eyes being wide fucking open, only to have to sell in a couple years and have it cost them something crazy like $100 grand. GL with whatever you decide.

    Haha sorry I got side tracked by the 4plex idea. But technically most 4-plexes under 1m would be a shit hole but decent land size (and most likely corner unit). Meaning I can tear it down 10 years down the road to build what I mentioned above. Similarly, the houses(mainly the lot) I am interested in are above 500k already and the phsyical house is old and would likely need to be knocked down if I do decide to live there. So 4plex or single house makes little difference, the key value is the lot. If the 4plex ends up costing more because of the bigger lot size, then it still justified.

    Honestly never looked into a 4plex until someone here mentioned it!
    Originally posted by beyond_ban
    Yo Kanye, ima let you finish, but 50 Cent had the best concert cancellation of all time.

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    Buying a 4-plex as your own home AND an investment is a major lifestyle choice.
    Let's all work on positivity this week.

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