The real estate market in Calgary definitely has been affected since the oil prices plunged a couple months back, but what that means is the lofty prices that sellers were getting are starting to come back down to earth. That means that renovation projects and even buy/fix/hold projects are starting to pop up all over town. We are currently vetting out a number of projects to renovate and sell, there is a lot more to choose from in the 250-400,00o range than there was even just a month ago. When the market starts to panic and the sellers get nervous prices start to make a lot more sense, however that does not mean the game gets much easier – there are still many competing offer situations happening right now in Calgary showing that there are investors both new and seasoned, coming out of the wood work to snap up some deals now that spring is here. Renovations are one of our favorite real estate strategies because it works in any market: up, down, sideways you can find the right property at the right price and add value creating a profit in all market conditions. There are some things you have to watch out for to be sure -such as keeping your costs in line, getting the project done on time, and having your holding costs being a low as possible. Once you have a great renovation crew and a system in place to make sure you have the property financed a the lowest costs possible then renovations become a trick you can pull out of your real estate toolbox any time of the year to drive some profits to the bottom line. These profits are also short term and normally high rates, which can help to build your capital to fuel your buy and hold passive income strategies or rent to own practice. The deals are not just in Calgary however, surrounding areas such as strathmore, airdrie, okotoks, and chestermere are also places we are seeing deals pop up this spring. Due to the downturn in the market (also at all other times of the year) there are owners going into foreclosure creating deals for investors to get into properties cheaper which increases your renovation profits. Common opinion is that you only get a fast re-sale in the big cities, but if you price the property right in the smaller regions with an excellent agent you can get the fast timelines you are looking for just like in the big city. Smaller centers do have one main challenge, which is confirming the after repair value based on a small (or very small) number of comparables. This can make the numbers trickier to nail down, but you could consider looking to adjacent towns with similar populations and demographics to give your numbers some more confidence. Renovations are a strategy that you can make huge profits in short time periods if you have a great system in place, take a closer look behind the renovation curtain and you just might find your pot of gold waiting for you!
To your Success!