Calgary Best Place To Invest In Canada

Calgary is the best place in Canada to invest in the residential real estate market, according to a new report released today.

The Real Estate Investment Network’s report said that Calgary experienced one of its best economic and real estate periods in Canadian history a couple of years ago but then entered a strong, and needed correction.

“During the economic downturn, Calgary’s market is making a predictable correction resulting in slightly more affordable housing compared to recent years passed,” said the report. “It was economically impossible for the market to continue at the pace at which it was heading and now finds itself adjusting to market realities.

“This adjustment period, as the market searches for its new foundation from which to build, should continue in 2010 as the provincial economy is poised for another growth spurt.”

The REIN report said the in-migration pace in the city continuing to lead the country combined with the “renewed affordability” will help propel the local market over the coming years.

“We, fortunately, should not see the massive over-boom situation we previously witnessed as the market remains more in line with the fundamentals,” said the report.

Following Calgary as the top Canadian real estate investment cities are Kitchener-Waterloo-Cambridge, Edmonton, Surrey, Maple Ridge, Hamilton, St. Albert, Simcoe Shores (Barrie-Orillia), Red Deer, Winnipeg and Saskatoon.

“Successful real estate investing is all about identifying a town or neighbourhood that has a future, not a past,” said the report. “Sadly, many investors like to invest based on past performance; thus, they are constantly chasing the market. This is called speculating – not investing.”

Using a HELOC for Investments

Jared Chamberlain Video Blogs about using a HELOC (Home Equity Line of Credit) from your home to invest with.  You will want to ensure that you keep your Lines of Credit separate from each other as you may not be able to write off the interest payments if you mix the usage of the LOC’s.  As well, don’t use your HELOC for any investments.  This is not free money for you to put into crazy risky investments. It has happened to too many people where they bet it all (majority or all of their equity)… and then loose it ‘all’ from a supposed excellent investment that didn’t cash out.  Please consult an expert in the field of your investment or someone you trust that is a sophisticated investor. If you would like to leave a comment or don’t agree with what Jared is saying please leave a comment below or email Jared at jared@tcgroup.ca.

Verifying Who Your Potential Renter Is

Jared Chamberlain video blogs about tenant verification. As a landlord you will want to make sure that you know who is moving into your property. Great resource www.TenantVerification.com. If you would like to leave a comment or don’t care for Jared’s thoughts, you can email him at Jared@tcgroup.ca

Calgary #1 Place To Invest in Alberta – REIN

I received my top ten cities report the other day, and guess what… Calgary is now the best place in Alberta for real estate investors.  This is good for a couple reasons:

1. The average prices and growth in the city will continue
2. This will be great for buyers in the next couple months as they are now purchasing into a potential steady market
3. Buyers over the past couple years who have seen a loss in their house may see some appreciation in their house value

What Don Campbell’s report shows is that after Calgary’s predictable correction of the last couple years we are at a point now where we have more affordable housing conditions, a stabilized economy and renewed optimism. This all bodes well for the next three plus years for Calgary to see above average growth in property values, in-migration and general happiness for Real Estate investors.

If you are in looking to make a real estate investment purchase, please let us know how we can help you out!

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Recipe For Early Retirement

Van Tran and Quan Doan, who’ve been married for 7 years, had a common goal. They wanted to be able to retire comfortably, and provide for their children. This is what has driven them to persevere and invest in real estate.

“We were hoping to generate a passive income while still working,” says Doan.

It was Tran who initially came up with the idea. Financial stability was a must, and he realized that purchasing and investing in real estate was a great option. It would allow the two to continue working fulltime, while acquiring additional rental income on the side.

In December 2003, Tran and Doan purchased their first property, a triplex in Ottawa, Ontario for $138,000.

“Our first rental property purchase was obtained from using the equity on our primary resident home,” says Doan.

The unit of choice was in great need of a makeover. “We prefer to purchase properties that are in distress so that we can fix them up and increase the value,” she says.

Winning properties
Being bitten by the real estate bug, Tran and Doan looked forward to adding more properties to their portfolio. They purchased two properties simultaneously, a semi-detached, and a duplex semi-detached in October 2004, each for $80,000.

Though each property was a great bargain, they both required a few repairs. They spent $5,000 per property to fix them up, and did all of the work themselves. “What we put into the property was lots of sweat equity but we save on gym memberships,” jokes Tran.

The hard work has paid off since each property has doubled in value. With the success of these buys, they invested in a triplex in July 2006 for $120,000.

Tran and Doan saw this property as a challenge since it had been on the market for quite some time and required extensive renovations. “We were able to see through the condition of the rental property and see a vision of how we could make the property valuable and desirable for rental.”

Now, a few years later that property is their most valuable at $275,000.

But selling is not their aim. Instead, Doan and Tran prefer to have a solid monthly rental income. When combining all of their properties, they have a 19 per cent return on rental income for a total of $81,000 per year. The majority of their tenants are university students, or couples without children since the properties are better suited for these individuals.

The formula for their success is that they always use the equity from their previous investment as a down payment for their next purchase. Tran notes that they never put anything down, and collect the rent from their tenant to pay for the mortgage and expenses.

Team work
The couple uses their unique expertise when investing in properties. While Doan handles the business aspects and maintains tenant relations, Tran takes care of renovations.

A background in engineering gives Tran the necessary credibility to tackle the technical renovations, such as heating, wiring, and electrical repairs. He performs all renovations himself except for paving and landscaping. Typically he replaces existing items on the property, therefore he doesn’t need a permit. But if he were to add something new, then he would have to get a licensed contractor, obtain a permit and get the job done.

“We always try to conserve costs, and the best investment that greatly increases the value is simply cleaning out the unit, painting it and adding new flooring,” says Tran.

The couple suggests that if you’re new to the real estate game, or don’t have the qualifications to do-it-yourself, then you should hire a professional. Though it might be tempting to save that extra dollar, you could damage the property and end up paying much more in the long run.

Bumps in the road
The experience hasn’t been without obstacles. Doan notes that they have had their fair share of problems, especially when they first began investing.

“Most of the issues have been tenant related,” she says. “In one situation the tenant didn’t pay their rent. Another one was more serious because the tenant didn’t care for the property.”

Doan recalls the latter situation because they had to take the tenant to court in order to pay for the damages that occurred. Since it is clearly stated under the Residential Tenancies Act for Ontario that the tenant is responsible for the repair or damage of a rental unit when it is caused willfully or by neglect, Doan and Tran won the case and the tenant was eventually evicted.

Now the couple always performs thorough background checks before accepting a tenant. They use a standard application form from Canada Mortgage and Housing Corporation (CMHC). The “Application to Rent” requires the applicant to fill out information including employer, banking institutions and references, and can be found on the CMHC website. Once the prospective tenant signs the application form, Tran and Doan complete a background check.

The biggest difficulty renovation wise came with the purchase of their latest property, a triplex on the outskirts of Ottawa. The basement was particularly problematic due to plumbing and wiring issues, and a cracked sewer line, which caused a flood.

“It wasn’t just cosmetic concerns, and instead there was a lot of skeletal work to be done,” says Tran.

He spent almost a year repairing the basement, and though the job didn’t cost much, it was extremely time consuming. Now, Tran hires local students to help him with the grunt work so that he can concentrate on the plumbing and electrical issues. Tran states that he keeps a close eye on these students by periodically checking their work, and never allows them to perform difficult tasks, or more than one task at a time.

Lessons learned
Tran and Doan rely on their gut instincts whenever they invest in a property. The two don’t believe that any property is unprofitable, and that sometimes the simplest renovations can bring about maximum returns.

“We purchased a property once for $80,000 and people told us not to purchase it because it would take $25,000 to fix,” says Tran. “I spent only $5,000, and now it’s been rented for three years and we’ve made $30,000 on it through rental income so far.”

At present, the couple is expecting their second child, and Tran is proud that they have the financial stability that allows his wife to take time off.

“It’s a really nice feeling,” he says. “Most people dream of retiring early. We’re still young, and we actually have the opportunity to retire in the next 3 years as long as we live within our means and have monthly income from our rentals.”

From the July/August 2008 issue of Canadian Real Estate

Top 5 Real Estate Investment Mistakes

1. You pay too much for the property. This one sounds obvious but 9 times out of 10 this is the one that catches most people. You get excited about the property and forget that this is a numbers game and not a paint colour game. Your agent is focused on making a deal happen so he forgets this is about dollars and not the carpet stain. All of your friends are making big cash (or so you think) and you want in! Who cares about the rent or who is going to pay it! Values go up and that is all you need to know……..right?!?

I am not one to negotiate hard for a rock bottom price as there are definitely other considerations in every transaction but unless your rent covers ALL of you costs and makes you money each month you have paid too much. Personally my cut off is $500. If I can’t make that much each month on the investment I don’t invest.

2. Inspections are for rookies! You have done a few renos and owned a couple of houses. You don’t need to pay someone $500 to tell you that this house is in great shape! I have looked at a lot of homes and many of them I thought were in good shape until the inspector came through. My last inspection saved me and my investor roughly $65,000! Was it worth the $500? Unless you have very large pockets (that you are willing to part with) or have extensive knowledge you need an inspection.

3. What is your exit strategy….How do you get out of the investment? Unless you have two very good exit strategies don’t put a dime into Real Estate. Getting out isn’t as easy or cheap as you think! What are all of my costs on exit? Real Estate fees, legal, renos, lost rent, mortgage pay out penalties and the big one (hopefully) taxes! When can I exit? Do I need to wait five years or can I sell this contract to another investor tomorrow? Is refinancing an option? You need to have clear answers to all of these questions or your investment may not be everything you hoped!

4. Who is going to rent my property? Most investments forecast a future value but the problem is that you need to get to the future to get that value. This is where the true asset comes in…..that is right….your tenant!

“A tenant is…a partner in business who will open up the shop each morning and lock it up at night. They will look after security and inform you of potential problems in the business. They will cut the grass, rake the leaves, shovel the snow, pay all the utilities. They will even pay all your mortgage payments and taxes. Then, in the end, they will relinquish all monetary interest in the business and walk away, leaving you with the profits.” ~Tim Johnson

So at the end of the day who is it that is willing to pay the rent you need to get to the future!

5. After I buy the property I don’t need to do anything right? Well, as great as that sounds the fun part is now over and reality is about to set in. For those that think that you just collect a cheque at the end of each month, I have some news for you. Not a day goes by that I am not dealing with one of our investments. Most of the things are positive but not all of them. Even if you have just one investment property you had better have some expertise in the following: Property Management, Repairs and Maintenance, Accounting, and Legal. These are things that will come up regularly and they don’t care if you have a job or are sleeping or are on vacation.

Bonus. You bought a property in the United States of America! Again, your friends are making money, even their cats are making money on the foreclosure market. One day, when the time is right I too will be putting money into the US but that won’t happen until the numbers make sense. When the CND/US Dollar exchange rate has a predictable positive effect on my investment. When values start to rise or at least stabilize. When the job market picks up and people can pay a mortgage or rent again. When I have a solid team in place to manage my assets. This is when I will be placing my investment dollars into the US. If you are placing money in the US right now you had better have a very detailed plan and a great team behind you.

Original Post by Wade Graham of Higher Ground Investments

Property Investment – How to Spot Bargain Properties

You can become rich with property investment if you know what you’re doing. Those who do their homework and seek the help of seasoned professionals can reap the rewards of their efforts. Those who don’t may be trained in this niche through trial and error, but that may mean a lot of time and money down the drain. There are 5 hot tips here to help you win in the real estate investing game. Later, you’ll find out how to get in touch with a leading company for property investment.

The first thing you need to do to be victorious in property investing is to locate a great buyers agent. Such an expert will help you find great properties and help you get the best prices for them too. A good buyers agent can teach you the ins and outs of real estate investing in the area you are interested. You’ll also find out from him/her how to settle on the properties that will meet your investment objectives. In property investment, buyers agents make the processes of finding, settling, and acquiring properties a tad easier.

Discovering great properties for real estate investment also entails the assistance of a property coach. These professionals have gone before you in buying investment properties and they will be the best source of information for every aspect of the process. A good property coach will move beyond the basics of finding the properties to financing and managing them as well. Property coaches will also provide tips on how you can spot properties with great promise and how to get them at the best rates possible. Select your property coach well so you get nothing but valuable advice.

When selecting a positive geared property, keep in mind the growth of the neighborhood and the value of the property. Really promising districts will not only offer great potential, but come with an established infrastructure to help limit risks. You can usually find these areas just beyond city borders, and they entail various types of properties. It is also a good idea to focus in on the lower end of the market, since it tends to be more resilient than median markets might. These items will help you find and buy the property that offers the best possible return on your time and money.

However, don’t try and cover too many suburbs at the same time. Concentrating on specific suburbs will help you know about the value of real estate in those areas faster. This technique will enable you to find properties at bargain rates before everybody else gets to know about them.

The biggest thing to look for is cash flow.  If your new property doesn’t give you a monthly return, it’s going to cost you more than just money in the long run.

Concrete Equities Admits To Breaching Alberta Securities Laws

Check This Out… A good friend of mine a world class blogger Jason Dunn made me aware of this article below. Thanks Jason!

CALGARY, Dec. 23 /CNW/ – The Alberta Securities Commission (ASC) has
concluded a settlement with Concrete Equities Executive Club Inc. regarding
allegations that it breached Alberta securities laws. As of June 2, 2008,
Concrete Equities Executive Club promoted and sold Class B shares to 18
Alberta investors, raising $1,620,000. Concrete Equities Executive Club
admitted it breached Alberta securities laws when it engaged in an illegal
distribution by distributing its Class B shares to 13 of these investors
without a prospectus and without being registered to trade in them.
Concrete Equities Executive Club paid $80,000 to settle the allegations
and $2,000 toward investigation costs. In addition, Concrete Equities
Executive Club has offered to recind and refund all investors who purchased
its Class B shares and has undertaken to refund the investments of the 13
unqualified Alberta investors.

The only reason I share this is to make sure that when you are looking into investments, whether they be in real estate, stocks or anything DO YOUR HOMEWORK… Make sure that you know what your purchasing and investing in is a sound investment.

Don R. Campbell on CBC’s The Hour

Last week, Don Campbell was on CBC’s The Hour with George Stroumboulopoulos (say that 5 times…).  Don is the President of The Real Estate Investment Network, who walks investors through what is happening in the market place along with how to professionally purchase investment properties.

If you missed the show, below is a link to the 10 min video of Don and George.

—Don R. Campbell On CBC’s The Hour—

Don touches on some hot spots in Canada, how the US will effect Canada and other great subjects.  At the end of his time in this clip, he does talk about investing is a thing for the future, and not an immediate cha-ching cash in.  Flippers in the market are not flipping…

Time Seems Right to Buy…

Shaken consumer confidence due to the world economic crisis has clouded the fact that it’s a great time to buy, says a leading real estate investor.

“People need to be telescopic in their thinking, not microscopic,” says Don Campbell, president of the Real Estate Investment Network, which has more than 3,400 members across Canada.

“Look five to seven years from now. Eventually, oil is going to come back, albeit not super hot, but between $70 and $80 a barrel, which will do super well here and create jobs.”

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