The Calgary real estate market has been suffering ever since the fall of oil last January. While the economy has been slowly regaining its footing, the housing market continues to be seriously affected. With so many job loses, people are leaving the city, leading to high inventory levels. These inventory levels have not significantly affected pricing of homes as stubborn sellers hold onto hope that the market will turn back in their favour. This leads to high prices and high vacancy rates.
These market conditions put landlords in a tough situation, as many are left with great properties that are going unrented. So, what can be done when vacancy rates continue to rise? There are two major things you need to do: you need to be tough on yourself and you need to be tough on your renters. Here is what we mean:
Be Tough On Yourself
You need to seriously assess the property you are trying to rent. When is the last time you did a comparative market analysis? If the answer is more than a year ago, you need to have one done again.
You cannot claim that your property is fantastic and so therefore you can demand the same rent as a year ago. Even the best properties are having to decrease rent. Consider where your property is, what it has to offer, what the downsides of it are and what other properties in the area are going for.
The reality is that suites that were $1200 monthly are going for as little as $700 now. It may seem like a big hit, but it is better than nothing. Consider offering a six-month lease: this way if the market swings back up you can re-evaluate rent later on.
Be Tough On Your Renters
Rental properties are becoming more accessible to more people as prices decline, which is a great thing for people looking for a space. The problem with this for landlords is twofold.
The first problem is that it means that people who have never rented before can more easily find a property. As a landlord, you may need to hold their hand a little while they learn. After all, we have all been there. This does not mean you let them take advantage of you, though. Make sure your lease is legally sound and very detailed. While they may not be able to provide references of past landlords, get them to provide references of past employers. These references can tell you how reliable the person is.
The second problem for landlords is that bad tenants are more likely to find properties since landlords are getting desperate to fill the space no matter what. Do not let this happen to you. A bad tenant will do more damage than no tenant at all. If you are concerned about finding a good tenant consider turning to a professional property management company. They will be able to find trustworthy applicants from a pool of previously screened individuals, and can aid in the legal side of renting a property.
Your Real Estate Professional,