Quote:
Originally Posted by opendoor
There'd be no leverage that way, so the potential returns would be lower.
Of course it's also far less risky. If you put $50K down on a $300K rental property and the price drops by 40%, you're underwater and you'd need to pay to get rid of the place if you ever needed to sell. If you invest in an REIT without leverage and it drops 40%, you can still get 60% of your money back.
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It works the other way as well though - if prices go up by 40% you've tripled your money. We bought a number of rental condos between 2009-2012 and sold half of them in 2014-2015 for really significant percentage gains. The ones we kept went down in value (both rents and prices) and have likely still not recovered to peak pricing although it has gotten way easier to rent things out now than it was during peak Covid.
Calgary has been a terrible market for the past ~8-10 years. But it isn't ordained that it will always suck just like it isn't ordained that Vancouver real estate will always go up. Oil being back to $100/bbl will almost certainly remain a catalyst for Calgary real estate, as will the huge disparity in prices between Calgary and the other large Canadian cities. Obviously rising interest rates are a risk.
I think the biggest issue is lifestyle. Now we have a couple of little kids and I'd be interested in cutting back due to the time involved. I keep my places well maintained so generally don't have issues during tenancy, but finding new tenants does take time (showings, meet to sign lease, do a move-in inspection).