Investing in real estate property and putting it out for rent is one of the many ways of earning income. A lot of planning and execution is required before renting a property in Alberta. Right from the initial choice to finalization of your purchase, you must keep a few things in mind. The geographic location of your land and accessibility to basic facilities such as markets and schools are important factors to consider before purchasing a rental property. Here are a few dos and don’ts of renting a property in Alberta:
1. Do keep your budget and rental amount in mind
There are numerous costs incurred while buying rental property. The overall market value of the property keeps fluctuating as per demand and supply. Conduct an in-depth analysis of the market before finalizing your purchase. Also, try bargaining with the seller to buy the property at an affordable rate.
If rental income is your priority, then look out for an appealing apartment as tenants are hard to please. Find out the average rental rates in the neighborhood and demand accordingly. Consider the potential of capital growth of your to-be land. If property taxes are expected to increase in the coming years, then what is affordable today might lead to bankruptcy in the future. Ensure that the average rent you will be charging compensates your mortgage payment, taxes and other expenses.
2. Do consider the proximity of your land to basic amenities
This is of paramount importance. Tenants prefer areas which are located right in the heart of the urban city, with good accessibility to basic facilities. Families will look for quality schools and good educational institutions in the neighborhood. If your property is good, but there is a deficit of schools nearby, it may affect the value of your investment. Choose locations with ample opportunities for employment and career growth. The presence of markets, playgrounds, hospitals and entertainment facilities nearby is a bonus.
3. Do hire a real estate agent
Consulting a real estate agent can make the entire investment process much easier. Brokers have thorough knowledge of the market value and properties in surrounding areas. They can help you buy the most suitable estate property for you at subsidized prices. They will guide you right from the initial step to the final choice of purchasing your land.
4. Don’t finalize your choice before getting approval for mortgages
A mortgage or loan approval is a loan from a bank or a housing society against the real estate property you buy. It allows you to pay the lender in monthly installments. Getting a preapproval gives you an edge over others in being offered properties. However, finding a mortgage is a tedious process. But that should not stop you from getting approval for the same.
5. Don’t buy your property in a hotspot for crime
No one wants to live in a dangerous area that is vulnerable to violence and criminal activity. Check out crime statistics for different neighborhoods and then finalize your purchase. Avoid buying properties in areas that are prone to natural calamities such as floods, earthquakes and tsunamis (unless your home insurance plan covers everything).
6. Don’t buy property that is more than 10 years old
You should not invest in property that is more than 10 years old as older construction sites burden you with additional costs of maintenance and repairing. You may not live in your property, but must keep an eye on the overall aesthetics and condition of the building. Do not purchase your land without considering the facilities, living condition and configuration of the rooms. Renovating your investment property is quite different from renovating your own house. While the former depends on your personal interests and preferences, the latter is more about the comfort of the incoming tenant and your final monetary return.
Are you planning on renting a property in Alberta? Your real estate property will likely be the greatest financial investment you'll ever make. With the help of a trained real estate agent, it can also be your wisest. Consider hiring a professional real estate broker who can help you with the complicated process of investing in the right rental property.