REB Canada’s investment focus is on residential real estate in the Calgary area. Some may ask, “Why are you investing in real estate in Calgary at this time?” The quick answers are leverage, predictable cycles, cash flow, mortgage pay down, and appreciation.
Leverage in investment real estate allows you to put down 20% of the purchase price and finance the remaining 80% of the purchase price. In other words you can own a $300,000 property using $60,000 of your own money. If the property price goes up $30,000, you keep all of it. You keep 100% of the profit even though the bank funded 80% of the cost.
“Why now?” Real estate moves in predictable cycles. Company investments cause job growth, causing people to move into an area to fill those jobs. Those people typically rent for a minimum of 18 months prior to purchasing a home. This drives up rental prices. Once those renters start purchasing properties, it drives up the housing demand and purchase price increases start to happen. Calgary is seeing company investment for job growth (decrease in available retail and commercial space) and people are moving into the area to fill those jobs, decreasing unemployment.
“Why Calgary?” Calgary is in a great spot to see real estate cycles happening. The oil industry drives the Alberta economy and Alberta housing. There have been billion dollar projects, mergers, and joint ventures announced every month in Alberta in 2011. We are spoiled in Alberta as this is considered the norm. Announce a billion dollar project anywhere else in North America and they would be jumping for joy.
Front line workers in areas such as Fort McMurray are the first people to be hired. After the front line jobs get filled, support workers are hired in Edmonton to support Fort McMurray. Once Edmonton starts seeing these jobs being filled, support workers are also hired in Calgary to support Edmonton and Fort McMurray. In Calgary, you can see the economic wave coming.
REB Canada’s real estate investment goal is to pay monthly cash flow from the rental income. Secondly, your mortgage is getting paid down every month. Finally, if you’re investing in an economically growing area such as Calgary, you will get appreciation in your property price. It is the law of supply and demand – the more people who come here, the less housing is available and it will drive the prices up.
Through cash flow, mortgage pay down and appreciation, you end up getting paid three times on one property when investing in real estate. You are leveraging your money by investing in real estate, getting five times the returns when compared to using only your own money. You are investing in an economically strong and predictable area in Calgary and we are currently seeing substantial company investment and job growth in our area.
Real estate is a fantastic opportunity in the Calgary market at this time. If you would like to know more about opportunities in real estate, please give our office a call at 403.719.8588 or email us at email@example.com.