Vancouver’s real estate market is famously red-hot, which is great for those already in. But for investors looking to break into it, steep prices can be a big barrier to entry. While COVID-19 has fanned the flames in overheated markets like Vancouver and Toronto, smaller markets like Calgary have seen encouraging growth while maintaining affordable prices.
In partnership with Shane Homes, a real estate developer and builder, we look at why Calgary real estate might be a smart move for West Coast investors looking for more value.
Like many parts of Canada, the Calgary housing market saw growth amid the COVID-19 pandemic as the demand for more space increased and low interest rates held steady. The Calgary Real Estate Board told Global News that Calgary saw its best February sales since 2014 this year and a 3.8 per cent increase in the benchmark price from a year ago.
Calgary condo prices have been significantly lower than those in Vancouver’s hot market over the last year. According to Re/Max’s Vancouver Housing Market Outlook, the average price for a condo in Vancouver was $802,591 in 2020. In Calgary, however, according to Zolo.ca, the average condo price for units sold in the last month was around $261,000.
Units in some new Calgary developments, such as the Mark 101, start at the upper $100s. Shane Homes is currently pre-selling the third phase of this condominium project. “It’s great to get it at that price point,” says Brooke Hawco, area manager for Shane Homes. “As an investor, when you get a renter, you can cover your mortgage and all your costs with rent because our price point is that low.”
Management companies can help remote landlords manage investment properties by screening renters and dealing with any issues that might arise, Hawco says. In Alberta, there are no rental amount controls, meaning rent can be increased to match market rate after the first year of tenancy.
When investing in a new build, investors can customize features to ensure they’re durable and renter-friendly. Hawco says one of the most common enhancements investors make is to swap out carpet in the bedrooms for luxury vinyl-plank flooring, which is rugged and easy to clean. Others features that can add value and make renters more comfortable are extra lighting or upgrades like adding an icemaker to the fridge.
“Each investor can add the tweaks or the quirks they want, that they think is going to give them a one-up on other rentals,” Hawco says. Shane Homes is offering 10 different floor plans in the Mark 101, as well as a selection of colour palettes, meaning investors can further customize their units for maximum value.
Condo fees can eat up rental income quickly, which is why it’s important for many investors to find a condo that has the right balance of amenities. “That’s also a massive bonus for investors,” Hawco says, adding that in the Mark 101, there are no amenities in the building that will require major maintenance and add to increased condo fees, such as a pool or meeting room. Instead, the developer focused on quality security, with cameras in the lobby, on each floor and in stairwells; 24-hour building entrance monitoring; and elevator access by electronic fob.
“I find it really quiet and safe and secure,” says Chelsey Tattrie, who has been living in a one-bedroom unit built in a previous phase of the Mark 101 since 2019. “I love the building.”
As a renter, Tattrie, who is also the marketing project lead for Shane Homes, was impressed by the building quality, especially compared with that of other condos she’s lived in.
“I find the units totally quiet,” she says. “I never hear my neighbours, which is awesome when you’re living in a condo.”
Tattrie loves running on the nearby trails, and is looking forward to returning to the gym, which is less than a three-minute drive away, as well as shopping centres and restaurants, all within walking distance.
The development’s location in the northwest Calgary community of Sage Hill is close to Calgary public transit, and it’s less than 10 minutes to Stoney Trail. The easy highway access means Tattrie and her boyfriend can easily escape to the mountains for a day of hiking or skiing, with Banff only an hour and a half away.
Tattrie also enjoys the community of the Mark 101, which she says is filled with other young couples and families. “We have neighbours that are super kind. Really they are very friendly,” Tattrie says.
With the Mark 101 pre-selling the third building, Hawco says this a great time for investors to buy. “As the building progresses, the prices will be increasing,” she says.
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