# Investing in Edmonton?



## Andre112 (Apr 27, 2011)

I have a co-worker who has 3 properties, each is generating $500/month from the rent. There were some hiccups along the way but it's all good now. She's happy with the rental income. She told me there's this seminar that she went to and got the idea from it. So I went to the seminar a few weeks ago. The person hosts the seminar is a real estate agent in Edmonton. She mentioned 3 areas:
North East (bargain area) - low entry price, 4% vacancy rate, takes up to 2 months to rent out
West (Transition Area) - lots of new duplexes, LRT light rail to be complete in 2017
Mill Woods (favorite area) - industrial area with easy commute (ring road and freeway), rented within 1 week.

I don't care about rental income as long as it break even with all the expense, but I do hope the property value appreciates quickly in a few year.
What are your thoughts?


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## ghostryder (Apr 5, 2009)

Andre112 said:


> I don't care about rental income as long as it break even with all the expense, but I do hope the property value appreciates quickly in a few year.
> What are your thoughts?




My thought is that investing in rental property that doesn't have decent net income on the hope that you might have a capital gain is a poor business model.


But then I'm no real estate expert.


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## Sampson (Apr 3, 2009)

Why Edmonton? Did the seminar compare cities within Canada and show convincingly that Edmonton represents one of the better areas to invest in RE?

If you are looking for capital appreciation in Real Estate AND you are willing to buy something outside of your city, then you should be looking at the best investment opportunities - this is probably not in Edmonton.

Sounds like a good sales pitch since they try to show they know the market and that your risk is limited/minimal, but did they also mention crime rates and other important aspects of those areas? I've lived in some of those areas, and while there is nothing inherently wrong with them, there is also nothing inherently attractive either.

Do an analysis of capitalization rates for typical rentals in different cities, and see what comes out tops, and whether it is worthwhile. Just wanting to break-even is a bad investment in my books. There is more money to be made elsewhere, why tie up money waiting 25 years for the 'mortgage to be paid off'?


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## Kim (Jan 10, 2011)

My thoughts:

Millwoods - well it's Millwoods - mentioned in the news too often for the wrong reasons. Northeast? Refinery supposedly coming in there - I guess if your not down wind of it, it might not be bad but depending on what side of the river your on access can be an issue for some areas. Not sure about the west side - new hwys and better access might mean more in demand??? 

I also recommend doing your homework on this option for an investment.


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## I'm Howard (Oct 13, 2010)

Buy REITS, you are Invested in R.E with professional management, good cash flow, and no potential Tenant problems.

Nobody has mentioned the problems that arise if you get a bad tenant who decided to harrass you at your home, who starts calling you in the middle of the night spaced out on something, who threatens to get even when you finally evict the problem.


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## Berubeland (Sep 6, 2009)

First of all I urge you to reconsider your idea that "breaking even" is close to acceptable. 

This vile concept means that you are almost guaranteed to shovel money into your property when you get a bad tenant, vacancy and so on. Furthermore, every day your property is getting older including the furnace, roof and so on. Ever tried to rent a house stuck in the 70's? The depreciation of your property also extends to the cosmetics. 

If you aren't going forward, you are going backwards. If you want to get into the rental business, you need to have a plan to make money! 

The real estate agent is in a conflict of interest. They only make money if you buy, if you lose money they don't care and you will be the one paying. Keep this in mind when getting their "recommendation"


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## Andre112 (Apr 27, 2011)

ghostryder, you are right. My business model is bad.

Sampson, they only did Edmonton, showed the growing GDP and job openings. Check off a few things on a check list. The reason I even begin considering is because I always thought about investing in RE but I was stuck with the idea that it has to be in Vancouver.

I suspected it being a sale pitch like most seminars and I have only been to Edmonton once a few years ago. That's why I posted here. So people with more experience and knowledge can tell me right or wrong. 

I am certainly going to do more research. 

Kim, I was thinking about the west side since the LRT provides good commute and my brother who lives in Edmonton recommanded university area.
Asking on this forum was part of my homework.


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## HaroldCrump (Jun 10, 2009)

Is your location correct (Richmond, BC)?
If you were to buy rental properties in Edmonton, what is your plan for managing them?
Do you plan to drive every weekend or fly ($$$)?
Or do you plan to hire a property mgmt. dude/company?


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## Andre112 (Apr 27, 2011)

Howard, I should consider that, too.
Berubeland, I've read your article on rental income. When I said break even that includes vacancy %, maintainance, management, and some extra expenses.


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## Berubeland (Sep 6, 2009)

Well Andre you have my blessing then (but I still think you should make break even +$1) but finding those properties is like looking for a needle in a haystack.


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## shaune (May 2, 2010)

*Edmonton has cash flow properties*

I invest in Edmonton and there are properties with good positive cash flow after all the expenses and contingencies are deducted.
They don't grow on trees and they are unlikely to be on MLS. Any good Realtor dealing with investors has their "go to" folks who get first crack at the good properties, often before they hit the MLS. If you do talk to Realtors make sure you get one who invests themself (ask what's in their portfolio) and deals with investors.
You need to make contacts and develop a network of people in the investing line of work. Talk with mortgage brokers as they get the 911 calls from future potentially motivated sellers who find out they can't re-finance for a variety of reasons and must sell. 
Edmonton is one of the best places in Alberta (and therefore Canada) to invest.
To follow up the earlier comments, investing purely for capital gain expectations is speculation. Get good cash flow. You may have to look at a lot of properties and throw out a lot of crud to find something suitable.
Good luck in your investment business.


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