Every.Single.Day.
Calgary Real Estate and Rental Market Update
February 1, 2023 - Written by Jamie Palmer, President/Broker of Power Properties
Behind the Property Management Scenes
I would like to give a big shout-out to the entire Power Properties team, Power Properties rented 31 properties in January! In other words, we rented one property every single day. Now some of you may say, ”of course you did, the rental market is hot”, and that’s true, but if you look behind the scenes, you will have to agree how impressive this really is. In order for us to rent those 31 properties, we had to screen 728 inquiries, then review the 408 that passed our AI screening, conduct 370 showings, review 203 initial applications, contact more than 100 landlord references, and 100 employment references, review over 100 credit reports, collect 31 application deposits (first month’s rent) and 31 security deposits, draft 31 leases, confirm insurance coverage and utility account activation, and finally schedule 31 move-in inspections! The team at Power Properties loves what they do, and it shows, that, along with industry-leading technology, and processes honed over four decades are what allow them to work together to rent a property every single day.
The challenge to find investment properties in Calgary
With the rental market so hot, many of you are chomping at the bit to purchase additional rental properties, however, over the past three months it has been difficult to find properties that are producing positive or even break-even cash flow. This is a result of the increased cost of borrowing, and unfortunately, even with the significant increases in rent many properties just do not produce enough rent to cover the expenses. Point2Homes released a study showing the difference in the cost of homeownership versus renting in major Canadian cities. Calgary had one of the largest spreads between the cost of renting and owning a home with a mortgage at $928/month (the entire report can be read here). A second factor making it challenging to find good rental properties is the overall lack of inventory with only 2500 properties of all types for sale, historically this would be between 3000-4000.
So what can you do?
Be patient, the spring market usually sees a boost in inventory (but also sees prices rise), use a larger down payment (but this will decrease your ROI), or budget for negative cash flow with the expectation that rents will continue to rise over the next twelve months and when the lease renews the property will likely cash flow. Given that the additional year of appreciation will likely offset the initial negative cash flow, this is likely the best course of action for most clients. If you are interested in purchasing another rental property talk to one of Power Properties' investment specialist Realtors. And guys, just a friendly reminder, February 14th is St. Valentine’s Day, and nothing says “Happy Valentines Day” like a new rental property!
Written by Jamie Palmer, President/Broker of Power Properties Ltd.
Jamie Palmer is the President and Broker of Power Properties. He holds a Certified Property Manager (CPM®) designation, the highest designation in Property Management in North America. He earned an Honors degree from the University of Toronto, and he has over two decades of experience in property management.
About Power Properties Ltd.
Founded in 1980, Power Properties has been providing hassle-free property management services to property owners, property investors and non-residents with homes in Calgary, Alberta for over 40 years. Our full-service property management includes everything from move in to move out, so you don’t have to worry about the day-to-day operations of your rental property. With a team of licensed professionals, years of experience, and award-winning service, you can rest assured that your property is in good hands.
