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Buying or Selling a Rental Property

Strategic Guidance for Buying or Selling an Investment Property in Calgary

For those looking to transact in residential income properties, you've made the decision to either supplement your income, to create long-term wealth, and capitalize on a growing city, which aligns with your financial goals. 

Buying or selling an investment property is very different than an owner-occupied one, and needs to be critiqued from an investor's perspective, rather than the lens of a home owner. 

Some would argue that a property can function as both, however in my experience, it's one or the other. When the lines between them begin to blur, the lack of clarity and strategy often leads to a sub-optimal outcome.

Selling resources

Buying an Investment Property

Purchasing an income property in Calgary is not a simple decision, especially if this is your first one. Running an investment property is much like owning a small business, so put your business-owner hat on! 

If done correctly, it is a very rewarding journey providing you time and financial freedom. However, it done incorrectly, rentals can be a big mistake for those who aren't prepared.

There are a number of factors to consider when assessing an investment purchase:

  1. Run the numbers & assess if you are comfortable with the worst case scenario
    • Understand market rents (best and worst case scenarios)
    • Understand expenses based on real quotes and discussions
  2. What is your ideal holding period?
  3. What is your exit strategy?
    • Sale
    • Refinance

Buying a rental property without a strategy is driving without a map – you have no idea where you're going, and when you arrive at a destination, you have no idea where you are or what to do. 

Always keep strategy in-mind that aligns with your financial goals. Different property types have different return profiles, so this is very important to understand. Possible strategic reasons:

  • Cash flow
  • Capital appreciation (active vs. passive)
  • Tax benefits
  • Long-term holds
  • Fix & flip

Return on investments can vary widely depending on the strategy you pursue, and how much work you're willing to put in, and how much risk you're willing to accept.

Needless to say, this is the bare minimum basics. This is just scratching the surface. If you'd like more information on how to run these numbers or access our pro-forma tool, reach out!

Investment Property Buyer FAQs

Should I prioritize cash flow or appreciation in Calgary?

Short answer: You need to know which one you are buying – and why.

Cash-flow-focused properties reduce monthly risk, but may have slower long-term upside. Think Class C/D properties which require a lot more management, rent collecting efforts, tenant issues, but at a low entry price at less appealing locations.

Appreciation-focused properties often sit in stronger locations with tighter supply but may run closer to break-even initially due to higher entry prices.

In Calgary, many inner-city investments lean toward long-term appreciation with neutral cash flow, while suited homes and multi-family properties often provide stronger income today.

Must have an idea of what your goal is – we'll help you get there!

What expenses do investors commonly underestimate?

Most underwriting errors come from optimistic assumptions.

Frequently missed or understated costs include:

  • Vacancy allowance
  • Maintenance and capital reserves
  • Utilities
  • Insurance and property tax increases
  • Condo fee volatility or special assessments (if buying into a strata)
  • Management expense (even if you're going to manage it yourself)

If the deal only works without these buffers, the risk is higher than it appears.

How important is location compared to price?

Location affects rentability, resale, and downside protection.

Things to evaluate beyond the address:

  • Proximity to employment, transit, and amenities
  • Neighbourhood tenant demand profile
  • Long-term redevelopment or zoning upside
  • Liquidity during slower markets

It all comes down to how resilient the location is, in a worst case scenario. As an investor, we're managing risk and understanding the downside is critical. A cheaper property in a weak location often underperforms a more expensive one in a strong area over time.

Is a secondary suite always a good idea?

Not automatically.

Things to confirm:

  • Legal zoning and permitting status
  • Ceiling height, window size, and layout quality
  • Separate utilities and fire separation
  • Insurance and financing implications
  • Livability (how is the noise attenuation between suites? does the breaker allow both laundry sets to be running at the same time, and cooktops? how much does one tenant's living activities impact the other?)

Poorly executed or non-conforming suites create tenant risk, resale friction, and financing limitations.

How do I evaluate rental demand realistically?

Do not rely on asking rents alone.

Instead:

  • Review leased comparables, not just active listings
  • Assess days on market for similar rentals
  • Understand tenant demographics for the area
  • Consider seasonality and turnover risk

The easiest property to rent usually delivers the best long-term performance.

What financing mistakes do investors make most often?

Common issues include:

  • Stretching leverage too aggressively
  • Ignoring renewal and rate risk
  • Structuring debt without future refinance flexibility
  • Impacting personal borrowing capacity unintentionally

Financing should support longevity and optionality, not just maximize purchase power.

Are condos good investment properties?

They can be – but only selectively.

Key risks to assess:

  • Condo fee trends and reserve fund health
  • Exposure to special assessments
  • Oversupply in the immediate area
  • Investor concentration within the building
  • Ability to do renovations / upgrades
  • Any restrictions on short-term rentals?

Well-managed, low-supply buildings outperform; poorly managed ones erode returns quickly. Ability to add value / differentiate the units, and unconventional strategies (STR) provide options.

Should I self-manage or use a property manager?

It depends on scale, time, and temperament.

Self-management works best when:

  • You are local
  • The property is simple
  • You value control over time efficiency

Professional management improves consistency and scalability but impacts net returns. The decision should be intentional, not reactive.

What is the biggest mistake first-time investors make?

Buying the property before defining the strategy.

Strong investors decide first:

  • Hold period
  • Risk tolerance
  • Income vs. growth priority
  • Exit scenarios

Then they select the asset. Not the other way around.

Selling an Investment Property

Whether you're looking to retire, take a step back from managing rental properties, rebalancing a portfolio, or wanting to offload underperforming assets, we're here to help with providing strategic and marketing advice to optimize your returns. 

First, we have to understand who we're selling the property to. As part of your exit, whether it's a flip, long-term hold, or underperforming assets, the requirement for marketing differs under each strategy (again, know your strategy!). 

The universal requirement for investment buyers are that they want clear numbers, realistic expenses, and a sense of the property's long-term potential and capital requirements (repairs, deferred maintenance, etc.). 

Working with us, we will prepare an investor marketing package for you to incorporate all the features, figures, and operating potential of the property based on real figures. 

Investors want opportunities presented to them, low friction, and efficient information – we help understanding your individual situation, and packaging up the sale to achieve the best possible outcome!

Investment Property Seller FAQs

When is the right time to sell an investment property?

Short answer: When the asset no longer aligns with your strategy.

Common triggers include:

  • Capital has outperformed expectations and can be redeployed
  • Cash flow has compressed due to rates or expenses
  • Maintenance or capital expenditures are increasing
  • Neighbourhood dynamics or zoning have shifted
  • Personal borrowing capacity is being constrained

The decision should be strategic, not emotional or headline-driven.

Should I sell with tenants in place or vacant?

Both approaches work, but they attract different buyers.

Selling with tenants:

  • Appeals to investors seeking immediate income
  • Requires clean leases, payment history, and cooperation
  • Can limit buyer pool if rent is below market

Selling vacant:

  • Broadens buyer pool to include end users
  • Often results in stronger pricing
  • Requires managing vacancy and timing

The optimal approach depends on property type and target buyer.

How do I price an investment property accurately?

Investment pricing is driven by income, risk, and comparables.

Buyers assess:

  • Current and market rent
  • Operating expenses
  • Cap rate expectations
  • Replacement cost and land value

Overpricing often causes listings to stall because investors underwrite conservatively. Think about it if you were on the other end looking to purchase an investment, what are the returns? Are they reasonable for someone stepping into your shoes? Do you leave the buyer will enough meat-on-the-bone to entice an offer?

What financial information should I prepare before listing?

Transparency reduces friction and increases buyer confidence.

Prepare:

  • Rent rolls and lease agreements
  • Operating expense history
  • Utility costs and property taxes
  • Maintenance records and upgrades
  • Any permits or suite approvals

Well-documented properties transact faster and with fewer renegotiations.

How do capital gains and taxes affect the sale?

Tax considerations materially impact net proceeds, and everyone's tax situation is different. Talk to your accountant for specific details.

Common factors include:

  • Capital gains exposure
  • Depreciation recapture where applicable
  • Principal residence exemptions (if relevant)
  • Timing the sale within a tax year
  • Tax offsets

Net outcome matters more than headline price.

Who is the likely buyer for my investment property?

Understanding the buyer informs pricing and presentation.

Typical buyers include:

  • First-time investors
  • Experienced portfolio investors
  • Owner-occupiers seeking flexibility
  • Developers or land buyers (in select areas)

Each buyer type values different attributes.

Should I renovate before selling?

Not always.

Renovations that help:

  • Safety and code compliance
  • Deferred maintenance
  • Improving rentability

Renovations that often do not:

  • Over-customization
  • High-end finishes without rent upside
  • Projects that delay market timing

Return on capital matters more than aesthetics.

What is the biggest mistake investors make when selling?

Marketing the property like a standard home rather than an investment.

Strong investment listings clearly communicate:

  • Income potential
  • Risk profile
  • Upside opportunities
  • Exit strategies

Clarity creates confidence – and confidence drives offers.

Data is supplied by Pillar 9™ MLS® System. Pillar 9™ is the owner of the copyright in its MLS®System. Data is deemed reliable but is not guaranteed accurate by Pillar 9™.
The trademarks MLS®, Multiple Listing Service® and the associated logos are owned by The Canadian Real Estate Association (CREA) and identify the quality of services provided by real estate professionals who are members of CREA. Used under license.