Calgary Real Estate Market Forecast 2018 ⌂ BC Pipeline Oil Price Update Home Prices Calgary Airdrie Downtown Condos Apartments

Calgary Housing Market and Update

What’s the forecast for Calgary’s housing market for 2018 and beyond? Right now, it’s cautiously optimistic for buyers who are in a good position to benefit from a growing pool of housing stock Calgary in summer 2018.

The real estate market in Calgary has been in the dumps for several years, however with the price of oil hitting $66 today (May delivery), it’s getting interesting for buying and rental property investment.

Calgary’s challenge is similar to other North American cities with a lack of supply. Listings of homes dropped almost 50% in some areas of thecity from last summer. These might be gobbled up fast if energy prices rise quickly this summer.

Unemployment however has dropped in the last 2 years and many believe the recovery is well underway — powered up by rising oil prices in US dollars x rising production numbers.

OPEC Willing to Throttle Output

Yes, Calgary is more than oil, but oil money is hard to ignore. Alberta needs the investment funds that flow in when Oil prices rise.

With OPEC cutting oil production output, and oil prices jumping past $66 a barrel (WTI) it’s awakening the oil patch. Alberta’s oil production rose to record levels in the last two months. Multiply that by rising prices and the economic outcome should be obvious.

Twice now, during the early winter, prices rebounded. The price is showing peristence. If it does this for 3 more months, investors will being loading money back into the Alberta economy.

The political situation in the US is calming down, US economic health is improving rapidly, and by shutting out China, the US will be keeping billions and attracting more investment money. Big picture looks really good. Prospect of a US housing collapse are low, even though Americans are very wary. That’s just smart.

If you’re considering moving to Calgary to work this year, be forewarned that Calgary is rated worst for affordability for lower income earners.

As of February 2018, average rent for an apartment in Calgary is $1129 which is a 12% decrease from last year when the average rent was $1264 , and a 3.72% increase from last month when the average rent was $1087. — from RentJungle Report

Calgary Housing Market Stats

As you’ll note sales are down from 18 months ago, and those were recession numbers. Most of the buying and selling were in the first half of the year, and there was a burst of buying due to the Fed mortgage rule changes.

It’s worse than it looks. However with the economy on the upswing and oil prices pushing through $55, there is some optimism.

In February, listings and sales fell yet home prices kept level. CREB suggests a steady path to recover and a market very similar to 2017. They suggest rising interest rates, tougher mortgage rules, and stagnating wages should calm the market this year. Financial people are always citing microeconomic factors and mortgage rates as housing market factors, however people buy when the economy is good and is promising.

The Stampede chuck wagon advertising auction created $3.2 million in bids. The oil patch seems to be optimistic!

Calgary Housing Report for February 2018

Calgary Monthly Housing Stats	February 2018	January 2018	October 2017	October 2016	September 2017

Total Homes Sales	657	583	910	1031	919
New Listings	1,293	1,288	1,483	1,326	1,873
Active Listings	2,456	2,199	3,250	2,574	3,479
Median Price	495,000	474,000	474,250	464,000	482,000
Average Price	575,407	575,407	544,984	529,378	556,372
Pending Sales			58	102
Days on Market	45	55	44	42	42

Above stats courtesy of CREB

South Calgary is the hot spot with 249 homes sold in February. The south has 799 homes listed for sale. 275 apartments were sold in downtown Calgary in February and there are 730 units available. CREB expects sales of apartments to fall slightly in 2018, so buyers might have the upper hand this spring.

The Globe and Mail reports that 30% of Alberta’s new inventory remains unsold. This has to be one of the best buyers markets ever for investors, as long as you don’t mind waiting for the payoff.

And with housing prices predominantly in the $300k to $500k range, Calgary is still considered affordable, especially compared to Toronto and Vancouver where life is painful for renters, mortgage holders, and buyers in waiting.

Chart courtesy of CREB. Timeline of Calgary home prices

Even the experts are voicing caution, probably because they’re not sure themselves who has control of oil prices, and whether the BC pipeline issue will be solved. And BC doesn’t seem to be batting an eye, as gas prices there rose above $1.50 a litre.

Rachel Notley pointed out the BC premier’s ironic and hypcritical stance on Alberta oil with his new subsidies for LNG projects in BC. BC gas prices look like they’ll go sky high by May and June and the resistance might begin to wane at that point.

Gas Price shock – Photo Courtesy of CTV.ca

And besides the BC carbon tax, and the investment killing removal of the corporate tax rate cut, there’s also the matter of how much Vancouver’s housing market can take as interest rates rise too.

This is a text book test of the merit and wisdom of government regulation. BC’s government run auto insurance sector is already in deep trouble, rumoured to be on the verge of bankruptcy.

Not only does Alberta ease the prices BC drivers pay for gasoline, the Federal taxes on oil production are steep and distributed to the other provinces. Everyone benefits when Alberta’s energy sector thrives. It’s vital for Canada.

The WTI WCS price differential is a painful loss for Alberta Oil producers and of late it’s gotten worse due to pipeline bottlenecks. Will it get worse this year?

Alberta’s production capacity is impressive and has recovered by 7,000 m3 from 2 years ago. The issue is getting it to world markets.

With the US and global economies looking good (the recent tariff issue with China should be resolved), demand for energy and oil is forecast to be strong. BP forecasts a strong demand from developing countries.

International investors with a long term investment strategy should compare what you can buy in Calgary for $400,000 vs what you’ll get in the Vancouver market or Toronto market areas and you can see the long term investment advantages. Calgary is a much easier place to do buiness and buy real estate.

Calgary’s spectacular Peace Bridge for pedestrians and cyclists spans the Bow River

Which are The Best Neighbourhoods to Buy a Home in Calgary?

As a long time resident, I can tell you there are many excellent neighbourhoods, with great schools, shopping, and recreation. All of it is accessible.

If you enjoy exercise, you may find the communities along with the Bow River best. There is a cycling/walking trail on both sides and the mountain biking park at Canada Olympic Park is on it too.

If you like beautiful views, Calgary has plenty. The northwest area of Calgary including those communities near Spy Hill, Coach Hill, and Nose Hill Park offer amazing views, and lofty prices too. The neighbourhoods on the northwest outskirts of the city offer unbelievable panoramic views of the Rocky Mountains to the west. Expect million dollar prices here. Homes on Spy Hill and Coach Hill offer incredible views of almost all of Calgary and the spectacular downtown skyline.

If water sports like sailing and windsurfing are important to you, Calgary has a number of man made lakes in the south end. The South has the largest selection of homes, with the Northwest next in number.

If you like cosmopolitan, the neighborhoods near downtown Calgary will appeal to you with the shops and walkability. And downtown’s plus 15 walkway system is close by too. Downtown city centre is where the condos are and virtually everything you need is here on 7th, 8th and 9th Avenue . The Bow River pathway is adjacent and Calgary’s convenient light rail transit can wisk you away to shopping in the south end of the city.

With the recession now largely in the rear view mirror, and with the price of oil rising steadily, homebuyers and property investors will be looking at Calgary homes differently.

With house prices so low, the expectation for buying residential properties in 2018 will improve. For speculators, the Calgary market is tantalizing, given that home prices in Toronto, Vancouver, Los Angeles, Bay Area, New York, and Miami have peaked.

Calgary’s low price entry point offers a great long term potential. And the selection of luxury homes in Calgary is as spectacular as the landscapes and views from many of the properties.

Inmigration to Calgary is rising and mortgage rates remain low. Although made in Canada housing policies will constrain the market, the outlook for Calgary real estate is for growth. The extent of that growth of course depends on the price of oil and the value of the Canadian dollar vs the US dollar.

The Price of Oil – Already Above Expectations

Oil Prices were never expected to rise near $50 yet are above $55 now. The Saudis have proven they control the price of oil, not markets. Tough to predict what they’ll do however their recent actions show some resolve and purpose. The fact prices have reached $55, well above the limits predicted by all the experts has to indicate something.

Screen Capture courtesy of Marketwatch.com

The World Bank may have posted the best forecast for oil prices through to 2020.

Screen capture courtesy of the IMF

You can check all the oil price predictions for yourself.

Price to list ratio revels that those putting up their houses for sale are receving 95.7% of their list price.
Total sales volume of apartment dropped slightly, however total sales in dollars dropped by $5 million compared to September.

Screenshot courtesy of CREB.com

Economic Predictions for Calgary

If oil continues to rise steadily in price, Alberta stands to recover economically. Businesses have pared down their costs and are better able to profit from growth. Although not officially a big component of the rosy Canadian economic forecast, Alberta and Calgary are keys to the future.

Alberta’s economy is much more diversified than it used to be however it is impossible to replace the revenue generation of the Canadian oil sands, the world’s largest pool of untapped oil reserves.

The price of WTI oil just reached $56, well above $30 a barrel last year, and there are indications the Saudis intend to cut production. The wise course of action is for governments to support the oil sands and other more costly production methods to grow oil supply. This would prevent OPEC from harming the growing US economy and the global economic upswing.

CREB’s 2017 Economic Outlook and Regional Housing Market Update

In the Calgary Real Estate Board’s most recent 2017 Calgary Economic Outlook and Regional Housing Market update, CREB believes the pace of economic recovery will be slow but stable. Stagnant employment, wages, slow immigration, tighter mortgage lending restrictions, and made for Vancouver/Toronto economic policies will weigh on the Calgary housing market.

The latest report does forecast for 2018. However, Alberta’s economic performance is expected to be well up at 4.3% for all of 2017. New construction housing starts will be well down this year at around 3500 units. Multifamily housing starts are down just slightly from 2016 levels.

Screen capture courtesy of CREB.com. Stats courtesy of CMHC.

Total house sales were precisely forecasted to be 600 higher in 2017 than 2016 with a price similar. Dead on accurate. New listings will total 32,731, 400 for the full year. Sales of apartment will rise slightly over last years numbers at about 2800 units.

The loonie remains around 78 cents CAD vs USD, maintaining an excellent premium on exports from Calgary, and exports of Alberta oil. Forex experts believe the US dollar forecast is upward, while the Canadian dollar forecast is downward.

If new construction starts are constrained, then the resale market may grow in the neighbourhood of 1% in 2018, 2% in 2019 and perhaps 3% in 2019. Of course, all predictions rest on the price of oil which as mentioned, the Saudis and OPEC control. And US shale production and drilling rig counts seem to moderate upward increases in oil prices.

The last word on the Calgary Real Estate Forecast is positive. Oil price is rising, the US dollar is climbing with President Trump’s new tax cut to raise the US dollar value. With Alberta’s growth currently reported at 6%, a solid Canadian economic forecast at 3.7% growth in 2018, we’re running out of reasons why Calgary isn’t going to boom in 2018.

Note: the preceding post is not meant as specific investment advice, but rather as a comparison of real estate investment or home buying opportunities. Please ensure you discuss all investments with a licensed professional.

January 20, 2017March 11, 2018

Best US Cities to Buy Rental Income Properties 2018 to 2020

Hottest Cities for Real Estate Investment 2018

Which are the Best Cities to Buy Real Estate?

It’s a rosy outlook for the housing markets in America and anyone buying real estate. Prices have moderated, new city markets are catching investor’s attention. However do you know which are the best cities to invest in real estate in 2018?

Do you have a strategy to buy in the best cities, use a property management company or use property management software to run your portfolio.

You’re just about set to make 2018 a great investment year. Have you looked at the forms of property investment should you choose — rental income suites, apartment buildings, or student housing reits? Open your mind the right type of property investment in the right city will outperform everything else.

Which cities and states offer the best employment outlook, lowest taxes, regulations, large millennial population, and a pro business climate? Florida, California, Michigan, Colorado, Miami Florida, Boston, Bay Area, New York , Massachusetts, or is it Ohio and Michigan?

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The most recent update on hot investment cities (average profit US-wide was at $336,000) for sellers still has San Francisco as the tops. And San Francisco Sunnyvale San Jose might be tops due to high rental prices, lack of housing and land, silicon valley paychecks, and an improving economy means there’s no bubble and no crash possible.

But the Bay Area isn’t the only city with potential. Dallas, Houston, Austin, San Antonio and Fort Worth are getting special attention these days. Texas is growing. Michigan has huge potential. Even Boston has potential. Businesses are relocating to these cities for a lot of reasons.

In this era of investment, the best property investments may be in other cities. Even if you intend to stay close to home, knowing what’s going on in other states might provide a superior return on investment.

As you may have read in my very popular post on US Housing Predictions for 2018 to 2020, the US housing market is hot and some cities are hotter than others. No housing crash is forecasted. The list below of the top 80 cities to invest in real estate represent your best opportunities for high returns. Even normally depressed quiet markets are coming to life and beginning to catch investor’s eyes. It’s good news for Michigan, Florida, California, Texas, and New York and even better for real estate investors in 2018.

Record Demand for Home, Condo and Apartment Rentals

The difference in this latest real estate rebound is the number of Americans renting and still needing to rent a home or condo. That’s created the incredible income investment opportunity called rental income investment properties for passive income investments or self-managed property investments. 30% to 40% returns are not unheard of. It’s once in a lifetime wealth building. The kind of cap rates major investors can only dream of. Get some tips on how to do homes for sale searching better.

Just an aside on investment opportunities in condo/apartments is student housing investment in Vancouver. You may want to check out the underlying fundamentals and demand for student housing.

Scorching hot opportunity in the best cities! Will the hot markets of San Francisco, San Jose, Silicon Valley, Phoenix, and Los Angeles do as well as expected? Those cities with the highest home prices are not your only option. There’s plenty more towns and cities across the nation where you can buy rock bottom and sell high including this list of real estate by zip code. Cities you’ll read about below with lower home prices and rising employment rates may be your best bets for 2017 to 2020.

One high performing rental income related opportunity to investigate is student housing investment in Vancouver. The student housing market in Vancouver is like no other place. Foreign families like Vancouver BC in Canada for many reasons. And the Canadian government is raising the limits on foreign students and on post grad immigration. That means lots of demand coupled with high rents which translates to big profits. A company called CIBT has dominated this sector and is growing fast. You can invest with them like a REIT.

Sharing is Good for your Professional and Social Life!

Make sure others learn about the once in a lifetime opportunity in real estate investment with rental properties.

With strong economic growth as certainly continuing, rental income investment offers multiple ways to grow revenue. And your property may look even better to another investor when you sell. Lets see what the experts predict and what the stats say about the best cities and zip codes.

Renter Statistics:

Growth in rental demand was largest for people with incomes lower than $25,000; a group that accounted for four million new renters over the past decade.
Growth for people with household incomes over $50,000 accounted for 3.3 million new renters.
There was an increase of 1.6 million renters for those with incomes over $100,000 a year.
The amount of rental stock also grew, and the single-family house share of the market increased from 34-40% of the total rental stock
Vacancy rate was less than 5% in 75% of the United States largest cities by 2015.

Stats courtesy of go.homebay

Apartment and Single Family Home Rental Price Index — Price Index Screenshot courtesy of AMERICA’S RENTAL HOUSING: Expanding Options for Diverse and Growing Demand

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Skyrocketing Home and Rental Prices in California are a Continuing Allure for Investors

In major urban areas such as San Francisco, Los Angeles, Oakland, Boston and New York, the demand for rental properties is skyrocketing. Investors might see ROI of 30% or more on rental income property and that beats any stock market these days.

Foreign buyers too, are purchasing lower priced homes now, likely because of high prices on luxury homes along with the fact they can rent them out — passive income which is a hot topic for babyboomers in particular. Realtors are seeing a much different type of buyer today and they need to keep up on how competitive properties are in other cities in the US and Canada. Investors just want a great return.

Home prices are rising everywhere, but what makes San Francisco so hot is its lack of housing stock and a booming job market. Where there is little growth in new housing development together with a healthy job market and a good demographic (millennials who can’t buy) the demand for rental housing has to explode.

Experts try to explain away this demand by blaming speculators and high housing prices, yet the driver of rental demand in San Fran is too many employed people with nowhere to live. And wages are rising. Silicon Valley’s rental market is so tight, there’s an overflow to Sacramento and other inland cities.

In-migration has been strong at a time when millennials are leaving home, contributing to rocketing apartment and home rental costs. This is fueling the tremendous demand for investment income properties. With no one building new homes and the government not acting to help, it’s up to private investors to take the helm.

With crazy high ROI, we’ll see rental income investors and developers race into these regions to build new properties. It’s a great investment situation for Americans, investors and realtors.

San Francisco is one area however that might not benefit. Its strong economy is driven by large tech corporations that add value to imported technology and products manufactured in China. Which is why Silicon Valley is hostile to Trump. California’s economic outlook is still very bright, but it’s low potential rental income outlook could send investors over to other US cities to invest in, such as those in green areas in the charts below.

Rental Income Property Investment Opportunities

With or without Trump, the US economic outlook is good. The outlook for rental income property is exceptional. Realtors and investment advisors should be looking hard at this market. Even babyboomer investors are looking at the potential of retirement income. Many babyboomers are a little nervous about how they’ll fund their “stay put” retirement plans.

They’ll need extra income to stay put and revamp their home over the next 30 years, and they may look to rental income to get that money. A percentage may just sell their home and leave it to a developer/investor to turn it into the multi-family unit. That investor might be you.

Here’s Realty Trac’s outlook on the best US cities to invest for rental property income

Complicating your investment decision is another set of statistics from Realty Trac that shows the west still has the highest returns currently but the green zones are predicted to perform better.

best-rental-income-cities — Screen capture Courtesy of Realty Trac

How about a 32% Yield on a Single Family Home?

(Screenshot above courtesy of RealtyTrac single family rental market reports)

Top 80 Cities and their Potential for Passive Rental Income ROI

These converted stats in this chart from Smart Assets are very insightful. They used U.S. Census data, to calculate the price-to-rent ratio in every U.S. city with a population over 250,000. This is their list of 80 US cities below with the worst potential for rental property income investment appearing at the top (The ones at bottom such as Detroit have better potential, unless employment fails to recover in Michigan).

	US Cities with Population above 250k	Price-to-Rent Ratio	Home Price (for a $1,000 Rental)
1	San Francisco, California	45.9	551000
2	Honolulu, Hawaii	40.1	481000
3	Oakland, California	38.5	462000
4	Los Angeles, California	38.0	456000
5	New York, New York	35.7	428000
6	Seattle, Washington	35.1	421000
7	San Jose, California	34.7	417000
8	Long Beach, California	34.6	415000
9	Washington, District of Columbia	32.0	384000
10	Anaheim, California	31.3	375000
11	San Diego, California	30.3	363000
12	Portland, Oregon	29.3	351000
13	Boston, Massachusetts	28.7	344000
14	Jersey City, New Jersey	26.3	316000
15	Denver, Colorado	26.0	312000
16	Chula Vista, California	25.8	310000
17	Santa Ana, California	25.3	303000
18	Sacramento, California	24.3	291000
19	Miami, Florida	23.4	280000
20	Austin, Texas	23.4	280000
21	Atlanta, Georgia	23.0	276000
22	Colorado Springs, Colorado	22.8	274000
23	Bakersfield, California	22.5	270000
24	Raleigh, North Carolina	22.4	269000
25	Riverside, California	22.4	268000
26	Lexington, Kentucky	22.0	264000
27	Albuquerque, New Mexico	21.9	263000
28	Chicago, Illinois	21.6	259000
29	Henderson, Nevada	21.6	259000
30	Chandler, Arizona	21.5	257000
31	New Orleans, Louisiana	21.4	256000
32	Virginia Beach, Virginia	21.1	253000
33	Fresno, California	21.0	252000
34	Newark, New Jersey	21.0	251000
35	Minneapolis, Minnesota	21.0	252000
36	Anchorage, Alaska	20.9	251000
37	Phoenix, Arizona	20.3	244000
38	Louisville, Kentucky	20.1	241000
39	St. Paul, Minnesota	20.0	239000

40	Plano, Texas	19.9	239000
41	Stockton, California	19.5	234000
42	Durham, North Carolina	19.5	233000
43	Las Vegas, Nevada	19.3	232000
44	Nashville, Tennessee	19.1	230000
45	Greensboro, North Carolina	19.1	229000
46	Mesa, Arizona	19.1	229000
47	Lincoln, Nebraska	19.1	229000
48	Oklahoma City, Oklahoma	19.1	229000
49	Wichita, Kansas	18.4	221000
50	Charlotte, North Carolina	18.1	217000
51	Cincinnati, Ohio	18.0	216000
52	Aurora, Colorado	18.0	216000
53	Kansas City, Missouri	17.4	209000
54	Tulsa, Oklahoma	17.2	206000
55	Omaha, Nebraska	16.7	200000
56	St. Louis, Missouri	16.7	200000
57	Orlando, Florida	16.6	199000
58	Tampa, Florida	16.6	199000
59	Tucson, Arizona	16.3	196000
60	Philadelphia, Pennsylvania	16.3	196000
61	Dallas, Texas	16.2	194000
62	Laredo, Texas	15.9	191000
63	Columbus, Ohio	15.9	190000
64	St. Petersburg, Florida	15.8	189000
65	Fort Wayne, Indiana	15.5	186000
66	Baltimore, Maryland	15.5	186000
67	Arlington, Texas	15.5	186000
68	El Paso, Texas	15.4	185000
69	Indianapolis, Indiana	15.4	184000
70	Houston, Texas	15.3	183000
71	Fort Worth, Texas	14.8	177000
72	Jacksonville, Florida	14.3	172000
73	Milwaukee, Wisconsin	14.2	170000
74	San Antonio, Texas	13.7	164000
75	Toledo, Ohio	13.3	159000
76	Corpus Christi, Texas	13.1	158000
77	Memphis, Tennessee	12.3	147000
78	Pittsburgh, Pennsylvania	12.0	144000
79	Buffalo, New York	10.7	128000
80	Cleveland, Ohio	10.5	126000
81	Detroit, Michigan	6.3	75000

What About the Local Economies?

Last year’s report from Millken research reveals the cities with the best performing economies in 2015. This was put out in December 2016. Florida cities are showing a marked rise. Recent reports focus on the apartment rental prices in San Francisco, Sacramento, and San Jose as offering outstanding returns for investors.

And this is Millken’s list of worst performing cities, likely the ones you might avoid.

Screenshot courtesy of Millken Institute. Read the detailed Millken 2015 Best-Performing Cities report with rankings by economic component. Excellent insight to help you fine tune your rental income property investment choices.

Their interactive map of US cities with the best economies below is a very helpful tool to help you measure the investment prospects of one city versus another.

Lowest car insurance in these cities: LA car insurance, Boston auto insurance, Phoenix car insurance, San Francisco car insurance, San Diego car insurance, Seattle car insurance, New York car insurance, Indianapolis car insurance, Detroit car insurance, Philadelphia auto insurance, Toronto automobile insurance, or Chicago car insurance.

In this video below, Mike Hambright talks about apartment rental markets, and how to make money from cash flow and property value appreciation.

Are There any Warnings?

This graphic from Coreglogic warns about overheated city markets. Yet it also shows how markets like Silicon Valley, actually has lots of room for rent rate growth. And New York has the lowest rent rate to home price ratio.

Screenshot courtesy of Corelogic.com

There are so many real estate investment opportunities in the US and in Canada too. Hopefully, my amateur US housing forecasts, predictions and unguaranteed advice will help you find those opportunities for the best upside in cash flow, safety and equity appreciation. Be careful with any investment. Do your due diligence.

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December 14, 2016February 17, 2018

Buying Property for Rental Income – No Better Investment for 2018

Is Rental Income Property the Best Investment in 2018?

Is there any investment opportunity that could beat income generating real estate in 2018 or for the next 5 years? Is the stock market correction making you look for other options?

Check out the best cities to invest in real estate and read this post below on rental income.

With your initial financing concerns aside, rental properties can offer a high, continuous extra income to help pay off your mortgage, meet repairs, and add confidence to your investment decision. If the work concerns you, consider using rental property management software to help out.

Cynics might point to cash flow issues, paperwork overload, and big unseen repairs as key reasons to be way of rental properties. You’ve seen those issues on TV shows, yet the buyers always seem to handle them an make a big profit. If your plan is to retire happy in Costa Rica or Mexico, this is probably the best way to make that happen.

Watch this excellent Video from Phil Pustejovsky about how to succeed: Take responsibility, think opportunity and take massive action:

If you’re concerned with a potential housing crash in 2017, the market stats don’t support that notion and it looks good to 2024. Review the Los Angeles Housing market forecast, San Francisco market forecast, and the New York market forecast for predictions and commentary. Contrast that with the Calgary Housing Forecast which has bottomed out.

Another promising area to investigate is foreign student housing in Vancouver and other high demand cities. Vancouver BC is very attractive to students from China, Hong Kong, Indonesia, Singapore, Dubai, Germany and other counties where wealthy families want to have their kids educated.

They find Vancouver safer and more relevant. CIBT is one company to watch with their huge portfolio of properties in Greater Vancouver, Canada.

Factors that Support Investing in Income Rentals

There’s a housing market crisis across North America and demand for rental apartments, condos and houses will stay high. It’s unlikely that a quick solution will happen to generate housing for everyone. This land development held up by legislation, it’s a sure bet that rental property is going to be a hot investment sector.

Here’s 11 Reasons You Should Take Rental Income Investing Seriously:

growing number of Millennials entering their family starting and home buying years
mortgage rates not forecast to rise much
rental prices can stay high because employment is good and renters have no options
stories of renters destroying the place almost never happen (renter screening process)
you can deduct mortgage interest and real estate taxes on rental properties
you can write off utilities, insurance, repairs and maintenance, yard care, association fees
write off upgrades such as decks, pools, tankless water heaters, and even landscaping
write off depreciation of assets/home
write off solar power generation unit
the income won’t become taxable until you run out of upgrades/repair costs
the renters will have to cover any cost of living or mortgage rate growth

That’s quite a compelling list of reasons why buying a rental property makes incredible sense. And if you live in the unit, then you’ve got your cake and you’re eating it too. So far from being a risky investment, rental income properties have built-n safety and tax features that make them a no brainer. All you have to do is find financing.

Here’s how to calculate the numbers on a rental income property such as cash flow, capital expenditures and all the rest.

What is a typical Return on Residential Rental Property?

I revealed in my previous post on rental property investment a return of 30 to 40%. On a common million dollar home in San Diego, Los Angeles, San Francisco, New York, Vancouver or Toronto, that’s 300-400 thousand dollars. I’ve seen homes in my neighborhood rent out fast at $5000 to $7000 a month.

Rental Income Property Calculator

Try the calculators from Rental Property Reporter or from Financialmentor.com.

Top Tips for Buying the Right Rental Property for You

decide which city has the best potential for rent prices and purchase price
decide what kind of property will work for you
decide whether you’ll be living in the property
determine how much capital you have to work with and how much you can sink into improvements
don’t buy a fixer upper
buy a home with the best likelihood of being rented:
buy a home in a lower price range to begin with (first time investor)
consider a property management firm that can handle maintenance and renter screening

Here’s some further resources to get you on your way to finding the perfect property:

http://www.investopedia.com/articles/mortgages-real-estate/08/buy-rental-property.asp

https://www.investopedia.com/articles/investing/090815/buying-your-first-investment-property-top-10-tips.asp

https://www.myhousedeals.com/cities/losangeles/

http://www.bankrate.com/finance/retirement/funding-retirement-with-rental-income-1.aspx

http://mesaproperties.net/best-places-to-buy-rental-property-in-california/

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