Investments in Edmonton’s real estate are not only safe, but also come with a sense of pride and security associated with home ownership. From investment trusts to apartments, from commercial real estate to mobile homes, Edmonton’s real estate market offers something for all.
Nestled in the heart of Alberta, Edmonton comes across as a prime location for real estate investment for a host of reasons. Among these, affordable housing, strong rental market, and good quality of life have contributed to a significant boom in housing investments across the city.
If you’re someone who’s looking to commit an investment with a good rate of return, we’ve got you covered with the ultimate real estate investment guide.
Investing Strategically: Why Real Estate in Edmonton?
The province of Alberta is a thriving destination for real estate investments in Edmonton owing to its socio-economic prosperity. In fact, in a recent survey, it was found that Alberta has the highest Gross Domestic Product (GDP) per capita across all of North America.
More particularly, Edmonton’s resilient market, diverse economy, and growing population make it an enticing prospect for investors seeking both short-term gains and long-term stability:
Steady Economic Development
As the capital city of Alberta, Edmonton is a prime hub for core economic industries such as oil and gas, technology, healthcare, and manufacturing, making it a strategically significant location. Additionally, low unemployment rates help mitigate many risks associated with investing, and make Edmonton real estate a good investment.
Significant investments by the state and public departments into infrastructure development also contribute to a higher standard of living, making it the ideal investment destination.
Affordable Housing
When compared to other big cities across Canada, Edmonton offers affordable pricing with relatively low property tax rates. The city boasts a range of real estate segments to choose from: condominiums, single-family homes, commercial spaces, or multi-unit properties: something for every category of investor!
Stable Rental Market
Being a prosperous economic hub, the city attracts a steady influx of skilled immigrants including young professionals, students, and families. This creates a strong demand for rental properties in the market which keeps prices in check. The ever-rising demand for quality rental accommodation in the city offers the perfect opportunity for investors to capitalise on the momentum by investing in real estate.
Edmonton Real Estate Investment: Finding the Best Bet
While it is clear that Edmonton’s real estate sector is a good market to invest in, thorough market research on the available options and strategising the timing of such investments is imperative to yield maximum returns.
A deep-dive into the real estate market cycle is crucial for making sound investment decisions. Ideally, one must start looking for a property when the market is in decline so that the property is purchased when prices bottom out. The resale should be timed when the market is booming to make maximum profits.
Finding the best bet is also dependent on exploring your investment niche. The most popular choices for real estate investments in Edmonton include:
Owing to the high standard of living in Edmonton, the demand for residential properties has fuelled an upward trajectory in prices. A recent study of the housing prices in Edmonton reveals that in the year 2023, the uptick of prices was steady and significant wherein the benchmark home price rose from $359,500 in January 2023 to a high of $376,800 in June. This trend makes residential properties across the spectrum an attractive investment option.
With a wide array of options available, investors can choose among single-family homes, condominiums, townhouses, or multi-unit complexes based on their investment strategy and risk tolerance.
Lately, condominiums have become a hot choice amongst investors owing to their affordability. Edmonton has one among the lowest condo prices across all of Canada, which makes this market particularly vibrant.
Real Estate Investment Trusts (REITs)
A real estate investment fund is perhaps the most secure investment instrument. It is based on a pooling principle, wherein REIT investors contribute to a single fund, which is then collectively invested in high yielding projects such as shopping malls, skyscrapers, apartment buildings, and the like.
The REIT route has also become popular because it is one of the most convenient and safest investments and investors are paid dividends on the returns from the common investment kitty.
Commercial Real Estate Investing in Edmonton
For investors with high capital flow and good risk appetite, commercial real estate is another option to explore. Investors can put their funds in acquiring office buildings, retail spaces, industrial properties, or mixed-use developments, which can then be rented out to generate consistent incomes. Diversifying the portfolios to capitalise on the city’s growing business landscape is a sound strategy when investing big.
House Flipping and Wholesaling
Both of these nuanced strategies work on the principle of purchasing at a low cost, retaining the property for a while, and later selling it off at a higher price. The differential in the waiting time yields profits.
In house flipping, the individual investor buys a relatively low-priced property, invests money into renovations as quickly as possible, and then sells the property for a profit.
A wholesaler, on the other hand, finds a good property for sale, secures and reserves it under a contract, and later sells the contract off to another buyer.
Vacation Rentals
Owing to its proximity to a host of natural attractions like Jasper National Park and Banff, Edmonton is an attractive tourist destination year-round. This makes it a lucrative avenue for generating rental income through investments in vacation rental properties.
Making the Right Choice: Factors to Consider when Investing
Based on the preferences and goals of your investment, below are some factors to consider before putting your money in real estate:
Location, location, location!
The adage is still king and is one of the primary factors when assessing profitability of an investment. For instance, proximity to amenities, green space, and scenic views strongly determine residential property valuations. Likewise, a closeness to markets, warehouses, transport hubs, freeways, and tax-exempt areas have the potential to drive up commercial property valuations.
New v/s Old
Both of these have their unique advantages and disadvantages. In the case of a new construction, while on the one hand, it comes with attractive pricing, the option to customise, and modern amenities, on another it holds the risk of delayed ownership, additional costs, etc.
On the contrary, an existing construction comes with benefits of low cost, quick ownership, pre-existing amenities, and so on.
Market Conditions
Trends in both the real estate market in general as well as the rental market are important considerations to make before investing in the sector. Buying low and selling high is the ideal investment roadmap. Likewise, in seasons of high demand for rental properties, investors can reap maximum returns.
Further, staying up-to-date with local regulations, zoning laws, and taxation policies is crucial for navigating any real estate market smoothly as they affect the overall costs and must be factored in before making a decision.
Investment Goals
Final decisions are based keeping in mind the ultimate purpose of investing. Depending on whether the investor is eyeing short-term gains or long run profits, the investment route can be charted out to best suit the needs.
With some of these factors as parameters, a survey conducted by retail firm Zoocasa indicates that the top three neighbourhoods to invest in in Edmonton are Terwillegar South, Falconer Heights, and Secord.
Is Edmonton a Good Place to Invest in Real Estate?
Finding the best bet for a real estate investment can seem like a daunting task given the myriad set of conditions one needs to assess and evaluate before proceeding with the investment. Our real estate lawyers are here to make things easier for you. Reach out today for a free consultation designed to simplify the investment process for you.