5 Helpful Tips for Buying Investment Properties

Buying your first investment property can be a challenging endeavour. It is becoming increasingly popular in Alberta, especially with the employment and economic boom that we’re experiencing, due to heightened employment opportunities. Purchasing an investment property when your mortgage is paid off is a great way to earn extra cash as long as you’re prepared to take on all of the responsibilities of being a landlord. Generally looking for a property in an area where rents and demand for properties will rise in the future is your best bet. If you’re looking for an investment property in Alberta, there are a few things to look for.

  1. Budget: What are you prepared to spend on this new investment; please note that investment properties require a minimum of 20% down-payment on the purchase of the property? Will you have to take out a loan? When you set our budget, make sure to include property taxes, utilities (if you’re planning to pay them), mortgage, maintenance fees and even land title office fees.
  2. Neighbourhood: When you have your budget set you should know approximately what neighborhoods you can look at in your price range. Once you have them narrowed down, have a look at all of the listings to make sure there aren’t too many properties on the market and that the properties are selling for a reasonable price. Getting the cheapest house is not necessarily the best idea. Also, if you are in a transient area (like a University area) you can expect young tenants and high turnover for renters. This is not necessarily a bad thing, but you will have to put more work into renting it out on a regular basis. Also, take a look at the amount of vacancies on the block – are there too many? If so, it may be a neighbourhood in trouble.
  3. Amenities: What are the amenities like around the neighbourhood you’re looking at? Specifically the addition of these amenities (either current or in the future) can help you raise your rent which is an advantage:
  • Grocery store
  • Transit
  • Reputable Schools (elementary and/or universities)
  • Walking or jogging paths
  • Restaurants
  1. Crime Rate: For obvious reasons, you would most likely want an investment property in an area with a lower crime rate.
  2. Development: Make sure you know what the city’s development plan for your area is (if any) and what they will be building in and around your property in the coming years. Development can have both a negative and positive effect on what you charge for rental fees.

For more information on real estate transactions, contact our Edmonton lawyers now.