Edmonton Real Estate Investor: edmonton rentals

Alberta Oil Sands Investment Real Estate News®
Glenn Simon Inc., Suite 1217, 5328 Calgary Trail NW, Edmonton, Alberta, Canada. Tel 1-888-780-5940 Fax 1-888-276-4517
www.glennsimoninc.com email: info@glennsimoninc.com

June 3rd, 2014
Volume 16, Issue 9

Dear Friends and Partners,

Just when you thought mortgage rates couldn’t get any lower, Scotia Bank pushes down their 5-year fixed to 2.97%. For first time home buyers these are amazing rate options and simply can’t get much lower.

The qualifying process has become tougher than it was a few years ago, even a few months ago, with CMHC. These changes are more in-line with current global lending practices and (slightly) better designed to reduce the number of default mortgages. At least Canada doesn't have NINJA (No Income No Job or Assets) loans.

The lowest rates offered are for properties deemed 'primary residences’. However, there are many terrifically low rates available for both residential and commercial mortgages. When we entered into the last up cycle in Alberta (2004-2007) we saw rates averaging 6%.

A great wealth building tip is to pay extra on your mortgage. If you are in a variable or fixed rate at 3%, adjust your payments so you are effectively paying 4.5% either bank the difference or increase your payment amount. When rates climb up you won’t get a shock and you will have added to your equity. Veteran investors may choose to divert the cash flow generated from low rates to build down payments and add more properties.

I like to run 75% of my rentals lean and upgrade the properties for top-dollar sales as an exit strategy. I also pay down my long-term keepers (15+ years) to clear off the mortgage for maximum cash flow then refinance to reinvest in another cash flow asset. There are many different strategies that you can deploy.

When and what strategy to use can be determined by measuring your current portfolio/lifestyle against your future ideal portfolio/lifestyle; the goal being to bridge the gap while improving performance along the way.

The news for mortgages is good - be sure to make a sensible investment and take advantage of the current lending environment.

North West Edmonton: Calder 4-Unit Cashflow

Turbo charge your portfolio. This 2002 built 4 suite (Duplex) property is located near Grand Trunk Park and minutes from the Yellow head Trail in the transitional area of Calder.

This property has front entrances for the 2 X 3BD main floor units and rear entrances for the 2X 2BD lower units.

This is NOT a legally built 4-plex but a duplex with lower units added.

Lots of modern touches and very good square footage. Shared laundry down, parking for 6 cars. Excellent access to Yellow head, downtown and Anthony Henday.

Comes complete with great tenants making this a totally turn-key property for you. Calder is a mature area that is showing early signs of transition. HUGE upside potential due to the age of the building, great purchase price, strong economic fundamentals and the proximity of this property in relation to Edmonton's desirable growing core.

*Please note: this is not a target area of Glenn Simon Inc’s but does offer potential for a ‘hands on’ investor.

Purchase price: $665K Total

Investment: $165K
Your Estimated 5 Year Profit $89,085.19K

Your pre-tax Total ROI is 54% or 11% per year

These 4 suites rent for top dollar and have everything arranged, including financing structure and incredible tenants. Your investment includes: impeccable tenant selection, financial analysis, professional inspection, insurance, financing set-up, legal fees, basic accounting, reserve fund, CMA, bi-annual statements, strategic market planning to ensure successful entry and exit, plus much more!

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Alberta housing market a standout performer

By Mario Toneguzzi, Calgary Herald, May 20th, 2014

CALGARY - Alberta has emerged as a standout performer in Canada’s housing market and while a slowdown in Canada’s broader housing market is underway, the province’s housing sector has been heating up, says a new report.
The Alberta Treasury Board and Finance’s Economic Spotlight said housing starts continue to trend higher, prices are accelerating, and the resale market remains firmly in seller’s territory in the province.

“The underlying driver is a robust economy. Alberta’s economy has grown at double the rate of the Canadian average over the past three years, and accounted for a disproportionately high share of the nation’s new jobs,” said the report. “ FOLLOW THIS ARTICLE

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Canada’s receptive oilpatch in line for trillions in new investment

By Peter Tertzakian, Globe and Mail, May 20th, 2014

The first trillion dollars came over one hundred years. The next trillion is likely to take only a dozen.

Last week, Western Canada’s oil and gas industry celebrated its centenary in Turner Valley, Alta. Since the time a big metal spike repetitively bashed a hole in the earth at an oil well named Dingman #1, Canada has grown to be the world’s fifth-largest producer of crude oil and natural gas. GRAB THIS STORY

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Lamphier: Ambitious industrial project to break ground this summer

By Gary Lamphier, Edmonton Journal, May 8th, 2014

EDMONTON - Edmonton’s downtown building boom gets a lot of positive media attention, as you’d expect.

The splashy new downtown arena, the new Walterdale Bridge, the growing forest of stylish new condo and office towers, and the new Royal Alberta Museum are quickly transforming the public face Edmonton presents to the world.

That’s something worth celebrating, and for most of city residents who wish Edmonton had more of Toronto’s busy urban vibe or a bit of Vancouver’s West Coast style, it can’t happen too soon. READ MORE HERE

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I appreciate all your calls and emails. I'm looking forward to helping you with your next step towards building real wealth.
Your success continues EVERYDAY, let me help you build for tomorrow.

“Action is the foundational key to all success." - Pablo Picasso

Warm Regards,

Todd and Danielle Millar

===SPECIAL NOTICE: NO CASH, BUT GOOD CREDIT? CALL US TODAY TO LEARN HOW YOU CAN OWN INVESTMENT PROPERTY===

P.S. Stay ahead by checking out Danielle's blog at Edmonton Real Estate Investor for all your cutting edge market news and information.

P.P.S. Don’t forget to visit our website and take advantage of the Resource Tools and product section including REIN's #1 real estate books and Quick Start homestudy sets at a discount. Get your copy of the Canadian Success Stories book and the 2010-2014 Top Ten Investment Towns of Alberta and Ontario.

I was reading the Globe and Mail online today when a link on the side caught my eye. The title "Could investment in a second property go sideways?" I chuckled. If you have to ask then you shouldn't be buying a second property...

However, there are so many "Real Estate Riches" seminars that tell you how great real estate is (which it is) showing the insane returns possible (which there are) because of the leverage a mortgage allows. The allure is strong but the hours, days and years of WORK after the thrill of buying your investment is almost never covered.

I want to tell you, as a seasoned investor, that the most important thing you should think about when you buy a second property is it going sideways - and what your Plan A, B, C to X will be.

When you can handle any situation that your property throws at you, you are a real estate investor.

Bad Things that have happened in my rentals:
Floods
Mould
Death ( Natural and Unnatural)
Evictions
Destruction
No rent
Huge Renovations
Tenant Bankruptcy
Midnight Moves

Good things that have happened in my rentals:
Exponential ROI
Excellent tenants that improved the property
Insurance Funds coming through
Helping tenants become homeowners
Getting my initial investment out and still having the property
Mortgage free ownership
Cashflow every month
Repairs on or under budget
Increase in flexibility/time/freedom

It's ying and yang! No investment is all up and no down. That's just a life fact and yes - it even applies to investments.

If you were holding rental property in Edmonton 2009 is not a year you will forget for a while. It's nothing new though just another trough in a city where up and down cycles come regularly like trains.

As prices on properties dropped more and more rental properties came on the market. Many investors were left holding properties that weren't selling at the price they hoped for. They had wanted to flip but market forces changed. Some of these impromptu landlords just wanted to get the money sucking property rented.

What do you do when the market is flooded with properties that don't sell? You rent for cheap! You offer stuff! You beg you plead and you cajole renters to get into your suite. The mortgage has to be paid right? I used every technique I knew to get rented and then some new ones too. Luckily we've seen this all before and were able to get get rented. For new investors it's a hard initiation for your first few properties.

Edmonton shuts down over the winter. It's one of the coldest places on earth and no one is going to be hauling a sofa around no matter how much beer they get.

It's only 5 days into the year and things just seem more positive. Consumer confidence is higher and hiring across Canada looks very optimistic for 2010.

High vacancy rates and price drops make for motivated sellers. As you become a more season investor these are the exact dips in the market you look for to increase your portfolio.

It takes mettle when all the news is bad but mettle IS what it takes.

Since Imperial Oil Ltd. and Suncor Energy Inc. have given the green light to previously shelved projects employment in Alberta is looking to pick up in 2010. It won't be the crazed hiring when there was a labour shortage but there will be jobs for skilled individuals.

What this means is that more highly skilled workers will be coming to Alberta to get jobs. They will subsequently be looking for a place to rent or live. For landlords that means houses to be rented or houses to be sold.

"What growth might happen in 2010 will be in the second half as a result of a recovery from the recession, whatever that might be," Roger Soucy, president of the Petroleum Services Association of Canada (PSAC)

The market we are seeing in Edmonton today is not so bad. In fact it's normal. There are a lot of properties to choose from and market prices aren't all over the place.

If you are a landlord the one thing you will have to contend with is renting your property and keeping it rented. Edmonton's vacancy rates went from 1% to about 4% now. That isn't really bad as long as you aren't in the 4%. Make sure your units are well maintained with a good property manager.

Rents are dropping so if your investment property was negatively cash flowing before you had better be very careful. It could turn into an alligator (Rich Dad - an investment that eats you).

Do whatever you can to reduce your costs: lower amortizations, if your bank allows it skip one payment, reduce maintenance and keep expenses to a minimum.

Cash flow is king in this market and actually in any market.

According to the CMHC Edmonton's apartment vacancy rate is at 1% with a forecast 0.8% next year. We hold a lot of mid to upper end units and we see a higher vacancy rate. Our units priced from $1600 (half duplexes or townhouses) to $2000 (3 to 5 bedroom houses) are renting but not as quickly as about 5 months ago. The vacancy rate amongst that range of units is closer to 4%.

A lot of houses on the rental market are those that investors couldn't sell in the current plateau. Some new landlords are not aware of the market conditions are are asking too much or too little for their property. However that "just right" is quite hard to find.

So if you are in low to mid range apartments you should have no problem renting if you unit is quality. Mid to higher end units now is the time to use a bit more effective marketing to get the perfect tenants. And remember winter is a harder time to rent.