January 2023
A new year and a new market in Calgary. After 10 years of static rents and high vacancy rates and escalating expenses, the landlords are finally getting a little relief. Vacancy will be the lowest it has been in 10 years and rents are finally going to a level that they should be in Canada's best city.
The secret is still the same in multi family properties, good location, good bricks and mortar and then do the proper redecorating to attract top quality tenants who can't wait to rent your units. All my landlords that do excellent redecorating are having a great time in this new market, record rents and high occupancy.
Interest rates are the only caveat to a great story, we expect they will soften in 2023 and be lower. Experienced landlords are still doing deals, but new buyers are fixated on the new rates and they are missing deals. Real Estate is a long term hold game ......you make sure the property covers itself, you maintain it and let the tenants pay off the debt. All of my clients who have done this are happy with the excellent cash flow they have and are complaining about how to shelter all the net income. A nice problem to have.
New Buyers come to me all of the time and they do not understand commercial financing. Usually they speak to a banker or a residential mortgage broker who they themselves do not understand how commercial underwriting works or the costs involved in securing the debt.
Financing cost look like this:
appraisal,
level one environmental,
building inspection reports fee,
lender fees,
mortgage broker fees,
legal fees.
If you are not aware of these costs speak to an honest knowledgeable individual who will educate you on this.. When it comes to acquiring a decent property to work with, again speak to an individual with experience who knows the market. I am always shocked at the lack of knowledge of some of the agents who contact me, if they would take the time to do some extensive research they would better represent their clients and not waste everyone's time. So jump on the multi family bandwagon as soon as you can. We are in for a great ride ahead.