Why Investing in Edmonton Real Estate Is a Good Idea
There are many options when it comes to investing. Some people prefer a passive kind of investment - something like a real estate investment trust. Others enjoy an active kind where they buy properties, renovate them, rent them out, and get cash each month. If you belong to the latter group, you should definitely consider investing in Edmonton real estate in 2022!
Why Investing in Edmonton Real Estate Is a Good Idea
But why Edmonton? Because this Canadian city is thriving - its economy is booming, there are plenty of job positions for locals and newcomers, education and health care systems are top-notch, and plenty of things to do on those days off. All these things are more than enough to have people wanting homes for rent right here in Edmonton.
However, we would be lying if we said that investing in Edmonton real estate comes with so many pros. It does, but it also comes with some cons. And that will be our topic of the day. That is, today, we will talk about some of the most important pros and cons of investing in Edmonton real estate. So, if this is of your interest, keep on reading.
Pro: Real Estate Appreciates Over Time
One of the biggest pros of investing in Edmonton real estate in 2022 is the so-called home appreciation. Namely, if you buy a property in Edmonton, it will increase in value over a certain period of time. Currently, all homes in Canada have increased in value from 0.7 to 5%. In Edmonton, there is an increase of 0.9%.
Of course, there is always a chance that you can buy the wrong property, buy the right property at the wrong time, etc. But, no matter what you buy, you can always improve it and sell it for profit too.
Pro: You Will Have a Steady Cash Flow Each Month
Another great benefit of investing in Edmonton real estate is a steady monthly cash flow. You get this money from renters (either commercial or residential ones) each month, and you can spend it either on repaying debt or building your real estate business.
If you decide to be a landlord, keep in mind that you will have to move somewhere close to this property as it will be your responsibility to care for it. But don't let moving scare you - even if you have to make a long distance move to Edmonton from somewhere far, you can always rely on simple transfer with experts, that is, with professional movers. However, that is a small price to pay for the income you will receive from the rent here. Currently, a one-bedroom apartment in Edmonton goes for $1,200, a house for $2,300, and commercial property for $14.28 per square foot.
Pro: Real Estate Properties Have Unique Tax Benefits
One of the last but certainly not the least important benefits of investing in Edmonton real estate in 2022 is the tax benefit. Or, let us say, tax benefits! Yes, as an investor here, you will be able to enjoy many tax benefits that will allow you to grow your wealth over time.
For instance, you will not have to pay for the self-employment tax, and the government will significantly lower your tax rates on long-term profits as well as approve your tax deductions against your other incomes. Moreover, as your real estate is your business, you will also get some tax-deductible expenses for running your real estate business.
Con: Real Estate Requires Money
As it happens in life, everything that has pros must also have cons. So, the same goes for real estate investing in Edmonton in 2022. Namely, if you decide to buy property in Edmonton, you will need to spare approximately $392,400 for a house and anywhere from $330,000 to $580,000 for a condo. Of course, these prices will vary depending on the location, square footage, and overall condition of the property.
Moreover, you will have to have enough money for a downpayment and closing costs. Then you will have taxes, insurance, maintenance, etc. And let us not forget about renovation and decoration money for making your property rentable. Thus, if you want to be this kind of investor, make sure you have some money on the side.
Con: Being a Landlord Is Not All Fun and Games
Another con of being a real estate investor is having to be a landlord. This may not be difficult to some - quite the contrary. Some people love being landlords. But there are also people who hate it.
As a landlord, you will have to move to a new city (if, of course, you are not from there). Maintaining the property will be your responsibility. And it will be your responsibility to be at your renter's reach at all times. Everything from cleaning and landscaping to replacing the old and the broken will be your job.
Con: Investing Can Come with Certain Risks
All in all, investing in Edmonton real estate, or investing in any real estate in the world, does come with certain risks. You might buy the wrong property. You might get stuck with bad renters; you might get overleveraged, etc. There are many more things that can happen if you are a first-time investor or if you are not being careful. So, make sure you educate yourself before investing in anything, and of course, make sure you have proper insurance.
As you have seen, there are many pros and cons of investing in Edmonton real estate in 2022. We mentioned just a few of them, but you already know that both lists can go on. Thus, do some research on your own and be sure to talk to real estate experts for Edmonton who can give you information firsthand.