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Pre-Construction VS Resale

Pre-Construction Dilemma: Choosing Between Condos or Houses for Your Next Investment in Calgary, AB

For new investors venturing into Calgary’s real estate market, one question often looms large: Should you invest in a pre-construction condo or a house? This pivotal decision can significantly impact your financial future, shaping your investment portfolio for years to come.

Understanding Pre-Construction Investments

In the realm of real estate, pre-construction investments are a unique and increasingly popular avenue. They involve committing to property units that haven’t yet been built. In Calgary, this investment strategy has seen a surge in interest, not just for its affordability but also for the lucrative returns it promises. By locking in prices at today’s rates, investors stand to benefit from property appreciation by the time the construction is complete.

Financial Aspects of Investing in Pre-Construction Condos

Initial Costs and Down Payments

One of the key attractions of investing in pre-construction condos is the relatively lower initial financial barrier. Unlike houses, condos often require smaller down payments, making it easier for new investors to enter the market. This accessibility can be particularly advantageous in Calgary’s competitive real estate environment.

An investment in an apartment complex that includes a playground with benches and swings.

Maintenance Fees

While condos may be more budget-friendly upfront, it’s crucial to factor in ongoing expenses like maintenance fees. These monthly charges cover the upkeep of common areas and amenities such as gyms, pools, and security services. While these fees contribute to a higher quality of living, they also add to the long-term cost of your investment. Thankfully, these fees won’t become an issue until after construction is complete, so if you plan to sell on or before completion, you likely won’t need to worry about them.

Potential for Appreciation

Data from reputable Canadian financial institutions, such as the Royal Bank of Canada (RBC), indicate that condos, especially those in prime urban locations, have experienced consistent appreciation in value. This trend suggests that a condo can be more than just a short-term investment; it can also serve as a valuable asset that grows over time.

Financial Aspects of Investing in Pre-Construction Houses

Initial Costs and Down Payments

Investing in a pre-construction house often comes with a heftier price tag upfront. Not only do houses typically require a larger down payment, but additional costs such as land transfer taxes can also add up. While this may pose a challenge for new investors, the larger initial investment can yield substantial long-term benefits.

Maintenance and Upkeep

Owning a house means you’re solely responsible for its maintenance and upkeep. From lawn care to roof repairs, these costs can accumulate over time. However, the upside is that you have complete control over the property, allowing for customization and improvements that can enhance its value.

Resale Value

According to financial experts in Canada, houses often have a higher resale value compared to condos. This is particularly true for properties situated in up-and-coming neighborhoods. The potential for land appreciation and the flexibility to make property improvements contribute to a house’s strong resale prospects.

Market Trends

Recent reports from RE/MAX Canada suggest distinct market trends for pre-construction condos and houses in Calgary. Condos are experiencing a surge in demand, particularly in bustling city centers. This trend is driven by a variety of factors, including the allure of urban living and the convenience of amenities.

On the other hand, houses are becoming increasingly popular in suburban areas of Calgary. The appeal of more space, coupled with the tranquility of suburban life, is attracting a growing number of investors.

Tax Implications

Condos

Investing in condos comes with its own set of tax considerations. One advantage is the ability to write off maintenance fees as a business expense, reducing your overall tax liability. However, it’s crucial to be aware that selling your condo could trigger capital gains tax, which will impact your net profit from the investment.

Houses

When it comes to houses, the tax landscape is slightly different. Rental income generated from leasing out the property is taxable and must be reported. On the flip side, you can take advantage of tax deductions related to property maintenance and improvements, which can offset some of your taxable income.

Long-Term Value

Condos

Condos present a unique value proposition for long-term investors in Calgary. Their lower maintenance requirements make them an attractive option for those looking for a hassle-free investment. Additionally, condos are generally easier to rent out, especially in urban areas, providing a consistent income stream that can make them a financially rewarding long-term investment.

Houses

Houses, on the other hand, are often cited in Canadian case studies as a more stable long-term investment. The potential for land appreciation adds an extra layer of financial security. Moreover, houses offer the flexibility for renovations and improvements, which can significantly enhance their long-term value and marketability.

An investment property with a front porch and a front yard.

Making the Decision

The choice between investing in a pre-construction condo or house in Calgary is a significant one that should be made carefully. Your decision should align with several key factors:

Budget: Condos often require a smaller initial investment, making them more accessible for new investors in Calgary. Houses, while more expensive upfront, can offer greater long-term value.

Property Management: If you prefer a hands-off approach, a condo might be more suitable due to lower maintenance requirements. On the other hand, houses require more active management but offer greater control over the property.

Long-Term Goals: Consider your long-term investment objectives. If you’re looking for a steady income stream, condos can be easier to rent out. Houses, while potentially more challenging to manage, offer the benefit of property appreciation.

Both investment options come with their own sets of advantages and disadvantages. Ultimately, the best choice will be influenced by your individual financial situation, lifestyle preferences, and investment goals.

Conclusion

From financial aspects to market trends and tax implications, the intricacies of choosing between pre-construction condos and houses as investment options in Calgary present its own set of challenges and opportunities. To navigate these complexities and make an investment that aligns with your goals, consider seeking advice from a qualified Canadian financial advisor.

Whether you’re venturing into the realm of pre-construction properties or exploring the resale market, navigating the real estate landscape can be complex. Before making any decisions, it’s crucial to consult with a knowledgeable real estate professional who can guide you through the nuances of each option. For personalized advice tailored to your specific situation, feel free to contact me, Danny Greene, at Danny@CalgarysAgent.com or by calling 403-605-6626. I’m here to help you make informed choices whether you’re considering pre-construction or resale properties. Let’s work together to ensure your real estate journey is smooth and successful.

Legalizing a Basement Suite in Calgary

Calgary is a dynamic city, ever-evolving in its real estate landscape. With the city’s increasing population and the demand for housing solutions, many homeowners are looking towards creating secondary suites. If you’re considering this route, there are certain steps you must take to ensure your basement suite is legal. Let’s dive into how you can transform your space and potentially add a new source of income, all while adhering to the rules and regulations set by the City of Calgary.

What is a Secondary Suite?

Before we dive in, let’s clarify. A secondary suite, often referred to as a basement suite, is a self-contained living space located within an existing residential home. This suite has its own separate entrance, kitchen, bathroom, and living area.

Why Legalize Your Suite?

– Safety First: Legalizing ensures your suite meets the City’s safety codes.

– Peace of Mind: With a legalized suite, you’re free from worries about potential fines or having to remove the suite in the future.

– Increased Property Value: A legal suite can potentially increase your home’s value and appeal to future buyers.

– Additional Income: With Calgary’s ever-growing population, rental demand is high. Legal secondary suites can be an attractive option for potential tenants.

Steps to Legalize Your Basement Suite in Calgary:

1. Check Eligibility: Before anything else, determine if your property is zoned for a secondary suite. You can do this by checking the City of Calgary’s [Land Use Bylaw].

2. Building Codes and Requirements: Ensure your suite meets the [Alberta Building Code] requirements. This might include egress windows in bedrooms, ceiling heights, fire resistance, and more.

3. Parking: Calgary bylaws require an additional parking space for your suite. Check to ensure you have enough space to meet this requirement.

4. Develop a Floor Plan: If you don’t have one already, you’ll need a detailed floor plan for your permit application. It’s advisable to consult with a draftsman or architect.

5. Apply for Permits: The City of Calgary requires both a development permit and a building permit for secondary suites. Visit the City of Calgary’s website to get the application forms.

6. Inspections: Once the work is complete and your suite is ready, it will need to undergo several inspections including building, plumbing, and electrical inspections to ensure everything is up to code.

7. Utility Meters: It’s up to you whether you’ll have separate utility meters for the suite. Some homeowners prefer this as it simplifies billing for tenants.

8. Register Your Suite: After everything is approved, make sure to register your suite with The City. This makes it an official secondary suite, which can be beneficial for resale value.

Challenges and Considerations:

Legalizing a suite isn’t just about potential income; it’s a serious commitment of time, energy, and money. Some challenges you might face include:

– Cost: Renovations and meeting code requirements can be expensive.

– Time: The process, from application to approval, can be lengthy.

– Responsibility: Being a landlord comes with its own set of responsibilities. Understand the [landlord and tenant rules in Alberta] before renting out.

In Conclusion:

Legalizing a basement suite in Calgary is a multi-step process that can greatly benefit homeowners in the long run. While there are challenges to consider, the potential for increased property value and rental income can make it a worthy investment. Always remember to follow the City’s guidelines closely and seek out professionals when needed to assist you on your journey to creating a legal secondary suite.

Note: Always consult the City of Calgary’s official resources or consult with a local expert when considering legalizing a basement suite to ensure you have the most up-to-date and accurate information

So there you go! Whether you’re buying or selling, these easy kitchen renovation ideas are sure to fill you with inspiration this year! And homesellers, remember, before you invest in any kind of renovation. Make sure to ask your real estate agent. So that you don’t waste any unnecessary time or money on a project. So if this is what you need feel free to contact me Danny Greene by sending an email at Danny@CalgarysAgent.com or call the number 403-605-6626!

You can also watch the blog video here:

TOP 10 REASONS TO MOVE TO CALGARY

The Top Pros

Calgary, situated in the heart of Alberta, is not only a city rich in natural beauty but also presents vast opportunities for both personal and professional growth. If you’re considering relocating or investing in real estate, Calgary may just be the perfect destination. Here are the top pros of moving to and buying real estate in Calgary:

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4 City Backyard Transformation Ideas That’ll Increase Your Home Value

You only get one chance to make a good first impression!
It sounds like a cliche, but it’s true! Especially when you’re selling your home. Many home sellers neglect the curbside appeal of their property but this is a huge mistake that could lead to lower offers than you expected because the exterior of your home is what potential buyers will see first. Luckily, you can transform your entire backyard without spending too much time or money and I’m going to tell you how!

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House Flipping Tax Implications: What You Need to Know

By Helena Mulder, May 2023

In recent years, house flipping has gained immense popularity thanks to captivating home renovation shows and the allure of quick profits. Many individuals are drawn to the idea of investing in real estate and making substantial gains through property flipping. However, before you dive into this exciting venture, it’s essential to understand the financial and tax implications involved. In this blog, we’ll explore key considerations you should keep in mind if you’re planning to start flipping residential properties.

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How to Refinance Your Home

In this blog, I’m going to teach you how to access your home’s equity. This is known as refinancing your home, Or refinancing your mortgage.

You need access to money now, But all of it is tied up in your home. Refinancing is a way for you to access that money now.

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Top 3 Parks in Calgary

For this blog let me tell you about three of the best parks in the city of Calgary.

Fish Creek Provincial Park

Fish Creek Provincial Park is the second largest urban park in Canada, with more than 100 kilometres of hiking and biking trails. Birding enthusiasts can observe more than 200 bird species along with Great Blue Herons, ducks, geese, songbirds, and bald eagles that nest along the Bow River valley. The Provincial Park is so large it includes a boat launch, the McKenzie Meadows Golf Course, The Bow Valley Ranche Restaurant, and the Sikome Aquatic Facility for a family friendly day at the beach. All these activities make Fish Creek Provincial Park a local favourite for a day in the great outdoors.

Prince’s Island Park

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