Investing

No you don’t. You can buy a rental property without the guidance of a buyer's agent.

We're biased - but wouldn't you want a top real estate agent to guide you through the largest investment of your life? For 25 years, we've been active landlords in Alberta and BC. The experience with our extensive personal portfolio allows us to give unparalleled first-hand advice about buying and managing investment properties. We are passionate about sharing our expertise across buying, renting and managing investment property for long-term success.

The three primary types of rental properties in Edmonton are short term, long term, and multi-family investment properties. All three types have their own pros and cons depending on your particular investment goals. We believe the type of investment you choose should be based on how much time you wish to commit to its management and how much money you wish to commit to the investment.

Revenue generating property is a stable method of income. We love investing in residential real estate because everyone needs somewhere to live and thus demand is always increasing. It is a steady and slow method of investing based on paying down a mortgage over many years. Although a home's value may fluctuate up and down over many years, the rental income and interest rate often remains stable.

Short term rentals can be the most profitable but require the most hands-on management. AirBnB and VRBO are the two most common vehicles for advertising these types of rentals.  Stays range from 1-30 days and rates are quoted on a nightly basis. They require constant cleaning services and restocking supplies.

Long term rentals range from 6 months to 5 years. They require the least amount of management and are often supplied unfurnished. Lease agreements normally average 1-2 years. This type of rental may offer a lower rate of return when compared to short term rentals but will require the least amount of active management. This is the most popular form of rental investment and it is ideal for those who do not reside in the City where the property is located.

Multi-family homes or buildings can be a great way to maximize your ability to generate revenue. They often rent every square foot available within the building while reducing overhead. Snow removal, grass maintenance, building managers and caretakers are usually associated with a multi-family building. Typically having more units per building increases the cashflow potential of the property. The largest barrier to multi-family investing is financing. The majority of these multi-family buildings in Edmonton cost between $750,000 and $2 million. Buildings with 5 or more units often require commercial financing and extensive inspections for insurance and the lender. Buying these types of properties can require pooled capital and multiple investors.

Apartment buildings and multiplex buildings in Edmonton can be an excellent investment. They can range from a simple 4-plex at $750,000 up to a 30-unit complex that approaches $3 million. Much of the cost of an apartment building is based on CAP rate, income potential, location, property condition and future land potential. These are often complicated investments and require the expertise and guidance of a seasoned real estate agent.

Condos are a form of investment where a landlord rents a condo unit within a building with common areas. The largest benefit to owning this type of rental is that the exterior maintenance is handled by the condo corporation or property management company. One downside is that condos have monthly condo fees which reduces your cash generating potential. Condos in Edmonton can be the perfect investment for those who live outside of Edmonton and want to take a hands-off approach.

The secret is out - Alberta is the place to be in Canada. Alberta is a very appealing province for people to move to. The cost of living is less expensive especially with lower rental rates, lower house purchasing costs, lower taxes, no provincial sales taxes and no land transfer taxes. The unemployment rate remains very low and thus we have seen a major net migration of people moving into Alberta. 

Ontario lost 50,000 residents to other provinces this year. 73% of those leaving Ontario chose to move to Alberta. We believe that Edmonton has amazing untapped potential for real estate investors.

St. Albert and Sherwood Park can make excellent investment opportunities. Both of these areas have higher purchase prices on average than in Edmonton, however the rent you can ask for is also typically higher. Tenants in Sherwood Park and St. Albert tend to be couples or families which can make for a more secure and long-term tenant. St. Albert and Sherwood Park also provide some of the best schooling and recreation in Alberta which makes them even more attractive to families who rent and want stability. The vacancy rates are extremely low in St. Albert and Sherwood Park which may further justify purchasing a rental property in these communities.

One of the big benefits of buying a tenant occupied is that it can help convince your lender that the unit is a viable rentable unit and give you immediate income upon possession. Having a tenant already in place saves the hassle of advertising, showing and screening prospective new tenants. However, when assuming a tenant, you are at the mercy of the type of tenant in place that the previous landlord has selected. Assuming a tenant also means you are assuming all of the existing terms within the current lease. As a landlord, you may prefer to go through the screening process from scratch in order to guarantee that you are comfortable with the tenant. This also allows the landlord to formulate their own rules and terms when accepting new tenants.

You can evict your tenant in Alberta if there is a ‘Substantial Breach’ of the lease agreement as defined by the Residential Tenancies Act in Alberta. A Substantial Breach can include non-payment of rent, major physical damage to the home and physical threats against the landlord or other occupants. The Residential Tenancies Act supersedes all terms in the lease. Eviction is often a last resort as it can be an expensive and inefficient process.

The Esposito Team helps with virtually all aspects of buying, selling and investing in rental properties. We give expert guidance before, during and after the purchase based on years of experience in being effective landlords. We do not offer full management services for rental properties.

Capitalization Rate is a method of determining a rate of return when using asking price and net operating income. The rate is reported as a percentage and does not include future potential for price appreciation. A higher CAP rate is better for the investor. Expected CAP rates vary depending where you are in a country and what type of real estate you may have. Long term rentals in Edmonton and area tend to have a CAP rate of 3-8%. Short term rentals tend to have a CAP rate of 8-15%, but they do require significantly more management. CAP rate is calculated by taking the Net Operating Income and dividing it by the price of the investment.

Most of our real estate investor clients in Edmonton and area experience an ROI of 3-15%, not including annual appreciation.

Average rents in Edmonton and area can range significantly depending on area, size, features and condition of the suite. Based on our large pool of investors that purchase with us, average monthly rents in Edmonton are approximately:

Average Edmonton bachelor suite rent: $900/mo

Average Edmonton one bedroom rent: $1,100/mo

Average Edmonton two bedroom rent: $1,300/mo

Average Edmonton three bedroom rent: $1,500/mo

Average Edmonton townhome/duplex rent: $1,800/mo

Average Edmonton full house rent: $2,000/mo

Vacancy rates in Edmonton are approximately 6.5% as of 2023. They are trending downward due to the higher interest environment and in migration of people into Alberta. We have achieved a vacancy rate of virtually 0% over 25 years with our personal portfolio. This is a direct result of specific actions and systems that we share with our investor clients.

The most obvious method is a sign on the front lawn or window which captures drive by prospective tenants. These potential tenants that drive by are likely already familiar with the area. The most effective online sites to advertise your rental property in Edmonton are Facebook Marketplace, Kijiji and Rent Faster. For condo investors, many condo corporations have online boards which have classifieds allowing landlords to advertise their vacancies there. This targets existing tenants within the building looking to improve their living arrangement or current residents that know someone looking to get into the building. A rental ad should clearly outline the cost of rent, utilities arrangement, term of lease and restrictions such as no smoking or no pets.

Legal suites are defined as municipally compliant units that are officially approved to be rented. They have been inspected and approved at the time of construction or renovation. Properties with legal suites are more expensive than those without and come with less risk to the investor. 

Non-Legal suites are very common in older neighborhoods. These are also known as as in-law suites, nanny suites, non-conforming suites. They may not conform due to heating, bedroom window size, fire code or other deficiencies. Renting these types of suites bring on liability issues if something were to happen to an occupant while they were your tenant. Additionally, if there is a complaint filed with The City, they are required to investigate and may require you to convert the suite to current standards on your dime. You may also be required to decommission the non-conforming suite. Homes which have these suites tend to sell for less money since they have not met stringent conditions required by the building authority. We do not recommend renting these suites out unless you have intentions of having them updated to meet today’s secondary suite guidelines.

Yes. Short term rentals, AirBnb and VRBO’s are allowed and are often granted with licenses issued by the City of Edmonton. Short term rentals can be restricted in certain condo complexes in Edmonton. Your Realtor can help guide you in the right direction based on your investment goals.

Specifically for short term rentals, we tend to see the highest returns and lowest vacancy rates in Downtown, Oliver, University of Alberta Area and in central neighborhoods near Edmonton's River Valley.

Yes, we can help. Flips are what many viewers witness on HGTV. Under our guidance, we have had clients that have made $90,000+ on a single flip project. We have also witnessed other less experienced agents misguide their clients, only to have the client lose tens of thousands of dollars. Our most successful renovator clients rely on us to guide them and advise on every aspect of the flip including searching, buying, designing, renovating, staging, marketing and finally selling the home.

Making money when flipping a home in Edmonton is extremely risky and thus requires the expertise and precision of a top Realtor with experience in this method of investing. While we have had clients make up to $90,000+ in profits from a single flip, this is not always the case. Flips require the purchase of a property that is often neglected or distressed. It is often gut-renovated so that a buyer is willing to pay a premium for a move-in-ready home in a mature neighborhood. Some flippers even go to a greater extent to develop a legalized basement suite so the new buyers get the advantage of a mortgage helper to assist in qualifying for financing. The most important factor that determines whether or not you will make money on a flip is the decisions you make regarding searching, buying, designing, renovating, staging, marketing and finally selling the home. This is why you need the guidance of a real estate agent with significant experience in this type of investing.