Tips for Investing in Rental Properties in the Lethbridge Alberta Canada area by Lethbridge Real Estate Expert Courtney Atkinson

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November 25, 2009, by Courtney Atkinson in Real Estate Investing

Tips for Investing in Rental Properties in the Lethbridge Alberta Canada area by Investing Expert Courtney Atkinson

Investing in rental properties can be a lucrative opportunity in Lethbridge Alberta Canada. In this article, we'll go over several tips to ensure you choose the properties that'll result in the best returns on your investment. After reading this article, you'll know some of the more common pitfalls to avoid with properties in Lethbridge, as well as the signs to look for in a great investment property.

Tip #1 - Look at Surrounding Properties

If you're buying your property to rent out, one of the most important steps you could take is to look at the rent market in the surrounding area. Is the neighbourhood filled with shoddy looking rental units or is it a family friendly neighbourhood?

What are units like yours renting for right now? Take 3-5 units that are similar to the unit you're considering your investment and average them out.

Would the income from this property be enough to cover your expenses?

Would you be able to do capital improvements that would enable you to charge more for rent?

How much increase do you think this type of rental market would bare year over year?

Tip #2 - Be Conservative

Be very conservative when you're calculating your numbers. It's far better to overestimate your numbers and accidentally make more money than it is to underestimate your numbers and find yourself draining cash.

A large number of investors are overly optimistic when they purchase their first unit. Generally the rental was a home in Lethbridge at one point and the investor feels it's worth more than it is to a potential renter.

Remember to account for vacancies and maintenance costs of Lethbridge real estate. These costs don't accrue all at once, but when they do come they can be large expenses. Figure what these costs will be over a 5 year period being very liberal with what those costs might run, then average them over a monthly period.

Tip #3 - Check Your Rental History

If the place you're looking at has been rented out before, how has it been renting out over the past years? How strong is the rental history?

If in the past the unit(s) has been consistently rented out with few vacancies, that's a good sign that the unit(s) aren't difficult to rent out. If the opposite is true, that should be a red flag to take into consideration. Just be sure that there aren't any hidden issues that will prevent you from accomplishing the same goals.

Tip #4 - Take the Low Hanging Fruit

Properties in Lethbridge Alberta Canada often have what I call "low hanging fruit" opportunities. These are improvements you can make to your unit that will immediately improve its sale value or rental value.

Some of the more obvious ones include steam cleaning the carpets, painting the walls, making necessary repairs, having tiles cleaned and so on.

Some of the more involved ones might involve finishing a basement, redoing a kitchen, or changing out a couple bathrooms. These are things that can be done by a competant handiman for little expense, when compared to the return they'll give you on your investment in Lethbridge real estate.

The key is to tackle the repairs that will give you the highest return for the least amount of work. The idea is not to repair every little thing, especially if it won't give you a positive ROI. Work your way up the list until you reach your break even point for ROI. This will ensure you've maximized the appeal of the property to prospective renters without wasting money should you decide to sell.

There is a lot of property for sale in Lethbridge and having a real estate professional on your team can help you to navigate the difficult process of buying or selling a home in Lethbridge. Call me at 403.795.7777 or email me at info@courtneyatkinson.ca to discuss Lethbridge real estate or Lethbridge land for sale and I will be more than happy to answer all your questions. Or, if you would like instant access to information about buying, selling, or building a home in Lethbridge, including Lethbridge real estate values and more, please visit the most complete website dedicated to everything Lethbridge real estate at http://www.courtneyatkinson.ca.

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