The time is ripe for buying an investment property. Here are 4 good reasons:
1. The Edmonton and area inventory is at record levels since 2007, which means there are lots of properties from which to choose.
2. The mortgage rates are low and just went down a little more this past week. 2.49% on a 5 year fixed is a great rate.
3. The Edmonton market has remained stable. This means you won’t be buying or selling in an inflated market.
4. There are more foreclosure properties on the market due to Alberta.
NOW is a great time to take that leap! Here are three main factors which will help you make a good decision for the long term investment.
LOCATION! You know the number one factor in buying ANY property is to consider the location for RESALE. When it comes to location of a rental or investment property don’t just look for what is there but also look for what isn’t there. Cheaper properties on main streets are an advantage to an investment for rental purposes. Being close to public transportation, schools, recreation and shopping are also valuable. But also consider what should NOT be there, power lines, un-kept neighbor’s yards, and surrounding properties which look like they need more “loving” than the one you are interested in purchasing.
The second factor to consider is LAYOUT! If the property has a functional layout, no matter how small it is, it will be a sound investment. The layout in an investment property can be changed, but those kinds of renovations are costly and the ROI is diminished. No matter what condition a property is in, cosmetic fixes can get you more rent and more resale value, but not if you are having to knock down walls, relocate plumbing and electrical lines.
And the third major factor to consider is to be sure there are NO RESALE OBSTACLES THAT CAN’T BE FIXED. For example a 2 bedroom home in a family oriented area will be harder to rent or resell than a 3 bedroom. Another example of a resale obstacle that can’t be fixed is inadequate parking for tenants. I recently considered purchasing a condo which needed gutting. That was not a problem. But when I phoned about the parking arrangements the property management company told me there was NO parking with this unit. Street parking only diminishes your prospective rental pool and limits the buyer pool for resale.
So after you get your financing in place and you begin to search for a property, consider these 3 main factors, LOCATION, LAYOUT, RESALE OBSTACLES. This will get you off to a great start in choosing your next real estate investment.