Whether it is in Edmonton, or any other major Canadian city, an apartment building can be a great investment if chosen properly.
A smart investor seeks out the suitable advice, gathers the necessary information, and then chooses the property that they will purchase. It is important not to let emotions influence the decision, and to do the proper homework first to ensure that the most practical choice is made.
This will mean finding the right professionals to assist in the process, whether that’s a trusted friend, or an experienced property management team. The more information you have, the more likely it is you’ll make the right choice.
- Get approved by the bank before shopping for an apartment building. You should always know how much of an investment you can afford. If you don’t know how much a bank may be able to loan you, then you may end up looking at places that are too expensive, which would be a waste of time.
- Learn about the potential hazards associated with owning and managing an apartment building. You should be familiar with the process and understand both the positives and negatives before embarking on this journey.
- Set a firm budget so that you know how much you can afford as a monthly payment. Don’t forget to take into account the rents that you hope to receive from each apartment. You should also include utilities and repairs as well as regular maintenance.
- Partner with a trusted property management team that has experience in purchasing apartment buildings. A trusted management company can also tell you whether an apartment building is a good investment or not. You will need to have a great relationship with this company if you want to find the perfect apartment building.
- Make a list of expectations that you have, including the size of the building as well as how many units that you will want to own. This is important because it will help you to plan the amount of income that will be brought in on a monthly and annual basis.
- Visit the potential apartment buildings with an experienced buyer. This will be of paramount importance as well. If you are inexperienced and you don’t know what to look for when shopping for an apartment, try to bring along someone who does (such as a property management expert).
- Discuss the offer amount with your advisors. It will ultimately be up to you to determine what is a fair and reasonable price. The very first property that you want may not work out, but when you do finally settle on one, your advisors will help the process go smoother.
- Read everything before you agree to the loan, including the length of the mortgage, the type of rate you are getting and your monthly payments. This will help to prevent any confusion further down the road.
- Understand what you are signing. There will be a great deal of paperwork throughout this process. You may also have to have a deposit handy to hold the building and to pay for some of the closing costs. Once everything is signed, you will be given the keys, and can pop the champagne!
Property Management Companies
Most investors will not personally manage their investment buildings. A top-notch property management company will keep your building in good condition, and collect the rents from your tenants in a timely fashion. For the investor that owns multiple properties, a property management company can save a huge amount of time, money and headaches.