Income Property in Calgary: What You Need to Know – Part 1
Income property in Calgary is a popular topic – and not just because of the hit HGTV show with the same name.
The current climate for buying and selling homes in Calgary is among the fieriest in the country. And with long-term population projections suggesting that people will keep flocking to our beautiful city for years to come, there really has never been a better time to invest in Calgary real estate than right now.
But what exactly is “income property” and is it really the right investment for you?
Income property is any property that has been bought or developed for the purpose of earning an income through renting, leasing, and/or price appreciation. Other terms used to refer to this type of property are “rental property” and “non-owner occupied” (for residential properties).
Rental property (AKA: income property) in Calgary is a strong investment venture, but as with all investments, it does have a certain amount of inherent risk. Read on to learn more.
Income Property Basics
Before we delve any further, let’s cover some basics. The first being why should you even bother considering this type of investment?
The answer is 4 simple words: Potential positive cash flow.
Yes, potential. As with any investment, nothing is 100% guaranteed. But in Calgary’s current market, this type of investment is considered one of the most likely to see a significant positive return on investment (“ROI”) .
Further, investing in income-generating property has the potential to do more than just provide positive cash flow. It can be:
- A big tax write-off opportunity
• A chance to retire early (if you invest early, wisely and successfully)
• An opportunity at long-term financial security for you & your family
Tax write-off opportunity
Tax write-offs for rental properties include such things as mortgage interest, property insurance, maintenance & repairs, property taxes, travel expenses, and even legal and professional fees.
According to Young and Thrifty, there are 2 different categories for the multiple expenses that can be claimed as tax deductions in Canada:
- Current expenses – something that reoccurs both often and every once in a while, such as general maintenance.
• Capital expenses – a more long-term improvement that will help increase the value of the property itself, such as structural renovations or additions.
To get a clearer idea of what can and can’t be written off with income generating properties, it’s always best to speak with an experienced accountant.
Retirement goals and financial security
Logic states that the earlier you start wisely investing in income-generating rental properties, the quicker you could potentially retire while seeing a more substantial ROI. It’s a dream that seems too good to be true… And sometimes, it can be.
However, if you invest in the right properties with the right timing, the right tenants, the right locations, and an appropriate rental/lease price, then that dream is way more likely to become a solid reality.
First things first…
But let’s tap on the brakes for a moment – while you may feel ready to hit the ground running and begin pursuing your own property investment goals, it’s absolutely crucial to get fully informed on the ins-and-outs of investing in Calgary real estate.
Start by talking to the right people and performing your due diligence so you can stay on the smart, realistic path to success. Connecting with knowledgeable people and educating yourself on the nuances of rent-generating property investments can ensure that you properly account for possible risks and make informed decisions about this type of investment.
Want to talk to a professional? Then get in touch with Elite Home Real Estate’s income property specialists! With the combined experience of 45 years handling local income property investments, our team of knowledgeable pros can help you find the answers you need to make the right real estate investment decisions.