The Line Worth Noticing on Your Mortgage Statement
Feb 1, 2025 - Written by Jamie Palmer, President & Broker of Power Properties
Alberta Real Estate and Rental Market Update: Calgary, Edmonton, Lethbridge & Medicine Hat
Why February Is One of My Favourite Months as a Rental Property Owner
February might be known for flowers, chocolates, and romantic dinners (and yes, this is your subtle reminder to book the restaurant and order the flowers if you haven’t already), but for me, February stands out for a different reason.
It’s the month when mortgage statements arrive.
When you open your annual mortgage statement from your lender, there’s one line you should pay close attention to: principal paid down. That number represents how much of your mortgage your tenant paid off over the last twelve months. And here’s the best part—the longer you own the property, the bigger that number gets.
Looking Beyond Rent in a Softer Market
In softer rental markets with higher vacancy, it’s easy to focus solely on declining rents. That’s often where the stress comes from. But many investors forget the other side of the equation.
A portion of every mortgage payment—funded by rental income—is going toward paying down the loan and increasing your equity. In simple terms, all things being equal, your net worth just increased by the amount of principal paid down.
Even in situations where rent isn’t fully covering expenses, that principal paydown still matters. Think of it as a forced savings program. On top of that, negative cash flow can result in tax savings.
For example, if your rental property expenses exceed your rent by $500 per month, that’s $6,000 per year. If you’re in a 40% tax bracket, that translates to $2,400 less in taxes owed. Every little bit helps.
What’s Happening in Alberta’s Rental Market
Looking specifically at Alberta’s rental markets, we’re still seeing downward pressure on rents due to the large number of new purpose-built rental properties that have come online over the past year. Despite strong population growth, supply has outpaced demand, which has kept rents competitive.
This is where the old saying comes into play: anything will rent at the right price.
Renters today have a lot of choice. If your property isn’t competitively priced, prospective tenants often won’t even book a showing. Put yourself in their shoes. If there are five to ten similar homes available in the same area, why spend time viewing the most expensive one?
A Long-Term Perspective
In declining markets, it’s generally more effective to make a meaningful price adjustment upfront rather than chasing the market with several smaller reductions over time. This is where listening to experienced property management guidance really matters—they see what’s actually renting, not just what’s being listed.
Rental markets are cyclical. While this phase may feel challenging, rents will stabilize and begin to rise again. Until then, take a look at your mortgage statement when it arrives this month—and don’t forget to smile.
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Written by Jamie Palmer, President & Broker of Power Properties
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
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, Lethbridge and Medicine Hat for over four decades. 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.
