Rental property.

[sewerrat]

Anyone of you folks own rental property?

Would any of you consider buying an investment property with this economy or wait.

We are toying with the idea of buying another house to rent out since it is a buyers market out there.

thoughts?

[Habfan]

You might have trouble finding renters ! I'm thinking of doing the same thing, I thought prices of homes would have been lower than they are though.

[Dean2]

If you are going to get into rental property give some consideration to where you want buy it. Toronto, Kelowna, Kamloops and Vancouver all have excellent rental markets and the houses appreciate much faster than they do in Edmonton and Calgary. Renting properties in Costa Rica, Mexico, Phoenix earns far higher rent on the invested dollar and you can rent to holiday travellers at 4000 a month instead of 1500 for the same place to a long term renter.

If you are in Alberta and want your rental property close to where you are, then think about commercial rental space. Commercial rental is Triple net (tenant pays repairs, property tax and utilities, plus any other operating costs), is far less work and the tenants tend to stay long term. Other thing that produces great income with less risk is self storage/vehicle storage set ups.

Dealing with the Alberta Landlord Tenant act is not for the faint of heart and means renting in Alberta has gotten to be to risky for the amount of dollars ties up.

[bbqcrazy]

We have two shops in Red Deer that we bought for rental purposes. Did great until this downturn. Out of 12 bays for rent we have 7 filled and dropped the rent on the remaining in order to keep the remaining tenants. The tenants are having a hard time keeping afloat.

They have been paid off for a long time so although we are still making money it's not a runaway right now.

Whether it's Commercial or residential if you can't be sure to fill them you better be getting them REAL cheap.

As far as owning property abroad, making sure on taxation rules etc. is paramount. I'm leary of investing money in a Country run by a guy with a sailor hat a cigar and a machine gun.

[sewerrat]

We were thinking just locally, not abroad.

Would you get a property management company to look after it all , or do it your self?

We were thinking of buying on Vancouver island, but that is crazy expensive there, bidding wars, over priced and if you purchase in BC the Land title transfer is in the thousands as here a few hundred bucks.

As you can see I have no idea how it all works.

[morinj]

Rental property's are a great idea if the extra capital is kicking around! When looking at a rental property, many aren't purchasing great big homes, but more modest size houses, these are the houses that don't see much fluctuation in the pricing, seeing as they are selling between 350k and 400k, and you can't build a descent house from the ground up for under these margins! Having a property maintenance company take care of your property is also a good idea, because, their is no way that you can count on renters to do this, unless you wanna do it yourself, it's a good way to keep the value in your house, and a attractive feature for the renter, and it can be attained for approx $150!

[Dean2]

Originally Posted by sewerrat

We were thinking just locally, not abroad.

Would you get a property management company to look after it all , or do it your self?

We were thinking of buying on Vancouver island, but that is crazy expensive there, bidding wars, over priced and if you purchase in BC the Land title transfer is in the thousands as here a few hundred bucks.

As you can see I have no idea how it all works.

With how little experience you have I would strongly suggest you find someone who has done this before and see if they will mentor you, or partner with you on the first couple of rentals. MOST management companies WILL take advantage of novice investors but if you could actually find one you can trust it isn't a bad way to learn the rental game too, just make sure they are willing to teach you.

Other way to learn the game is for you or your wife go to work for an apartment block as the manager for a short while. You will learn all about residential rental in a real big hurry.

Once you get to know what you are doing you may find there is far better money and a lot less risk on the residential side by being the management company. Most charge 8 to 15% of the gross rent, and that is more than most investors make after expenses, not counting capital apprciation.

Final bit of advice, you are talking about a lot of money, if you aren't willing or able to invest a bunch of time end effort learning how to do it safely and right then don't do it at all. It becomes gambling and your chances of loosing your money are very high.

[Mackinaw]

Originally Posted by sewerrat

We were thinking just locally, not abroad.

Would you get a property management company to look after it all , or do it your self?

We were thinking of buying on Vancouver island, but that is crazy expensive there, bidding wars, over priced and if you purchase in BC the Land title transfer is in the thousands as here a few hundred bucks.

As you can see I have no idea how it all works.

With the market the way it is I would not think of buying rental property at this time unless you are adding to an already secure portfolio that can carry it through this lean time.

As far as a properly management company unless you have to many to handle yourself it will just eat up your profits.


Mack

[The Cook]

Try Canmore, not much of a vacancy rate in this tourist fueled economy and there are 2 or 3 property management outfits in town. Two duplexes being built just on my street alone and a whole new subdivision out by Stewart Creek golf course, condo/hotels that are in a rental pool when you are not using them generating income. We've been in a real estate bubble for as long as I can remember.

[lmtada]

Originally Posted by sewerrat

Anyone of you folks own rental property?

Would any of you consider buying an investment property with this economy or wait.

We are toying with the idea of buying another house to rent out since it is a buyers market out there.

thoughts?

Not yet

[Peace Meal Farm]

Originally Posted by sewerrat

Anyone of you folks own rental property?

Would any of you consider buying an investment property with this economy or wait.

We are toying with the idea of buying another house to rent out since it is a buyers market out there.

thoughts?

I would consider a rental property these days, but only the right one. In fact, I did just buy a rental 4-level split level in downtown Whitehorse. My plan is to rent the lower 2-bed, one bath unit and move my family into the upper 3-bed, two bath portion. We will likely be there for a few years before moving out and renting both units.

Whitehorse - while very expensive - is nearly recession proof thanks to its false economy being propped up by massive funding from the feds. Throw in the high cost to renter the housing market and you're left with a large base of renters. Having rented there myself in the past I can attest to high prices and competition for spots.

When it comes to Alberta these days I would be weary of the cheap buys. Low prices equate to low demand, and the risk of vacant units is high. Where you may get lucky is a high-priced executive home priced to sell in a big centre like Calgary. I feel that demand for low-cost, value priced homes is as high as it has even been due to the state of the economy and new mortgage rules. You may not get as strong of a deal on a 'cheap' home when compared to a luxury unit.

[rocpilefsj]

Make sure you can float the mortgage as well as your own for an extended period of
time if need be. Be extremely picky with who you rent to. Never rent to friends or family. I got rid of my rentals as it became too much of a headache trying to kick people out, recover damages and owed rent, etc. I'm sure there are good renters out there but the ones I dealt with were few and far between.

[lmtada]

Originally Posted by rocpilefsj

Make sure you can float the mortgage as well as your own for an extended period of
time if need be. Be extremely picky with who you rent to. Never rent to friends or family. I got rid of my rentals as it became too much of a headache trying to kick people out, recover damages and owed rent, etc. I'm sure there are good renters out there but the ones I dealt with were few and far between.

True words.

[Scott h]

Originally Posted by sewerrat

Anyone of you folks own rental property?

Would any of you consider buying an investment property with this economy or wait.

We are toying with the idea of buying another house to rent out since it is a buyers market out there.

thoughts?

I own a few properties doing exactly what you are suggesting. I would consider more in Alberta but at this point I personally believe the prices have yet to hit bottom. The prices you are looking at are down slightly from there peak but still have lots of room to drop. Many people who bought at or near the peak and put minimal down will be looking to re do their mortgages in the near future and their incomes will probably be lower. Rental properties are also bringing in lower rents. All this will continue to drive prices still lower.
Now's the time to talk to bankers and get your financing worked out. Then get a real estate agent and start going through homes. Don't count on the mls sites as the properties look much different in person.

[hunting4?]

Originally Posted by Scott h

I own a few properties doing exactly what you are suggesting. I would consider more in Alberta but at this point I personally believe the prices have yet to hit bottom. The prices you are looking at are down slightly from there peak but still have lots of room to drop. Many people who bought at or near the peak and put minimal down will be looking to re do their mortgages in the near future and their incomes will probably be lower. Rental properties are also bringing in lower rents. All this will continue to drive prices still lower.
Now's the time to talk to bankers and get your financing worked out. Then get a real estate agent and start going through homes. Don't count on the mls sites as the properties look much different in person.

Totally Agree. We have 7 at this point. Down from 17 at one point. I think prices have not really started to drop. but with todays leaders who knows!

[FISHBATTEREDBEER]

Keep in mind that most renters are people who couldn't get a mortgage and may have financial troubles.We are considering a condo or an apartment in a popular tropical area to rent out while were not there.Often these can rent for $300+ a night if you pick a good location.Most people looking for a condo to rent in such a place have money.We are going to buy a luxury condo with 3 bedrooms,the master will have an ensuite .It will be locked up and rented as a 2 bedroom.We will most likely rent it as an adult only unit with a large damage deposit to discourage house wreckers.

[HalfBreed]

I don't think I'd step in now, but that's just me.

[sewerrat]

Well we looked at 5 property's today all 5 were empty and from the 5 we found 2 contenders. 2 out of the 5 properties are foreclosures.
Oh man the one foreclosure was just nasty, and that house was only 10 years old it is amazing how people can live.

The other foreclosure was actually quite nice, just needs a lick of paint and some other cosmetic fixes .
And by talking to the realtor we think we can get it for a pretty decent price as it has been on the market already for 86 days.
We will see what happens.

[Scott h]

Originally Posted by sewerrat

Well we looked at 5 property's today all 5 were empty and from the 5 we found 2 contenders. 2 out of the 5 properties are foreclosures.
Oh man the one foreclosure was just nasty, and that house was only 10 years old it is amazing how people can live.

The other foreclosure was actually quite nice, just needs a lick of paint and some other cosmetic fixes .
And by talking to the realtor we think we can get it for a pretty decent price as it has been on the market already for 86 days.
We will see what happens.

Keep in mind that the realtor only gets paid if a sale is made. Also is the place priced what is was worth in around 2004 when oil was around $50 ?

[D4l3k]

remember the rental income you get gets taxed as income

besure to factor that into your rental charge by figuring out your floating cost and add some % on top to cover your income tax

[Okotokian]

I'm getting $300 a month less for my condo than I was three years ago. So factor that in. Do a lot of research on rents.

[JDK71]

I have a 7.5 acres with a 2001 mobile and a 35x40 shop all fenced is rented right now .Lots of big trees right off hwy 22 to Rocky 5 mins from clear water river and 20mins from Burntstick Lake . just seeing if this is something you mite be looking for. Asking 280,000

[sewerrat]

We have been doing lots of research, and by the sounds of it you can write a lot of things off as well. That is according to the Federal gov site.

[B-radshaw]

I have had good luck purchasing properties with a legal basement suite. This generates a lot more revenue for the house and protects you some when it comes to vacancies. I have never had an entire house vacant. It will however limit possible renters to small families, single people or couples. Purchasing these units next to a university has made finding renters easy. For the most part I get 4 years out of the renter. If the tenant leaves for the summer I generally offer a lower rental rate to hold the place over the summer months. Lots of houses out there with illegal suites as well.

[sewerrat]

The property that we are looking at is close to schools and parks and trails, so it really is good for a small family, we were even thinking of approving a pet as those places are hard to come by and the property is all hardwood and tile.

But there will be a non refundable pet deposit.

[hunting4?]

Originally Posted by sewerrat

Well we looked at 5 property's today all 5 were empty and from the 5 we found 2 contenders. 2 out of the 5 properties are foreclosures.
Oh man the one foreclosure was just nasty, and that house was only 10 years old it is amazing how people can live.

The other foreclosure was actually quite nice, just needs a lick of paint and some other cosmetic fixes .
And by talking to the realtor we think we can get it for a pretty decent price as it has been on the market already for 86 days.
We will see what happens.

Realize that all foreclosure sales must go through the courts and the sale must be approved. Also the lender has to approve the sale.

There are next to 0 deals once a foreclosure hits the court process.

[6speedGTX]

We have a couple of rentals, it is a steep learning curve without the right support. I would suggest joining a real estate group such as REIN/Real Estate Investment Network, and attending any classes and seminars that you are able to make it to. The REIN program called ACRE is an outstanding weekend course, and no they don't try to sell you anything. Just good information.

[R3illy]

Originally Posted by sewerrat

The property that we are looking at is close to schools and parks and trails, so it really is good for a small family, we were even thinking of approving a pet as those places are hard to come by and the property is all hardwood and tile.

But there will be a non refundable pet deposit.

With no risk there is no reward. I have a few rental properties and have been paying attention for another. Some condo prices have dropped 20-30k in some buildings im watching from just last year so there are some steals out there happening. That's pretty significant when it comes to condos.

Remember treat this like a business transaction. Don't get emotionally attached and don't be convinced to buy something just because your realtor thinks its a good deal. The banks know what homes are selling for so i doubt the foreclosure will be as great of a deal as your realtor thinks. They wont drop the price past a certain point as they have access to all of the comps out there.

[dukla]

Biggest detraction for us is to find renters this market. My wife and I discussed doing this but like sated I think property will drop a bit more, and we want to be in a position to be able to carry another mortgage for a few months if we hit a renter lull.

[Dean2]

Originally Posted by 6speedGTX

We have a couple of rentals, it is a steep learning curve without the right support. I would suggest joining a real estate group such as REIN/Real Estate Investment Network, and attending any classes and seminars that you are able to make it to. The REIN program called ACRE is an outstanding weekend course, and no they don't try to sell you anything. Just good information.

Another piece of great advice. I would strongly suggest you take the courses BEFORE you buy anything. There are always lots of properties for sale, there is no rush to jump in until you have the education and knowledge to do it safely.