Lethbridge Alberta has always had a strong reputation as a tight rental market due in large part to the University of Lethbridge and the Lethbridge College and the large number of students they attract to southern Alberta. Of course, the first choice rentals for students tend to be the low cost rentals, typically basement suites and small apartments. However, as the students fill up those properties they displace and move working class people up and into condos, half duplex, and starter homes.
For most real estate investors Lethbridge is one of the safest choices to invest in real estate. Most of our students enter 2 or 4 year post secondary programs, but most stay for 4 to 6 years. This provides a landlord with the potential to have the same student tenant for a long period of time, which is great for those who are seeking a decent stable return on their investment. The actual return will vary with the type of property purchased and the type of financing or leveraging employed, but the tight rental market makes for lots of potential.
Depending upon how hands-on the property owner is, different properties may be more suited to their tastes. Some may prefer complete hands-off ownership and have a licensed professional manage their property for them. This service typically runs between 5 to 10% of the rent but allows the investor to sit back from the investment and just watch it grow.
Prices in Lethbidge have relaxed since their peak in summer of 2007 and there are some decent bargains to be had for the savvy investor with an aggressive bargaining strategy.
Here is an article which appeared in today's local paper regarding CMHC stats on our current vacancy rate.
Robert May
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Robert May is the broker and owner of Rainbow Realty of Lethbridge Alberta. He is also a licensed mortgage associate and financing expert with Canada First Mortgage of Calgary Alberta. He has been in the real estate industry since 1993 and offers full MLS real estate services to Lethbridge and surrounding area, as well as mortgage financing, refinancing/renewals, preapprovals, and home equity financing to Lethbridge and Southern Alberta. He can be found online at www.LethbridgeLoans.com
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| Thursday, 11 December 2008 | ||
That’s the assessment of Diane Randell, project manager with the city’s Social Housing in Action committee, regarding a new Canada Mortgage and Housing Corporation study which shows the overall rental apartment vacancy rate in Lethbridge in October increased modestly to 1.8 per cent from virtually zero a year earlier. “I interpret these numbers to be insignificant. A healthy vacancy rate is between three and five per cent,” said Randell, who’s also manager of community and social development for the City of Lethbridge. “We’ve got almost 1,000 people on waiting lists right now.” Locally, the vacancy rate for one-bedroom apartments improved the most, increasing to 2.9 per cent in October from 0.3 per cent in October 2007, according to the corporation’s fall rental market survey of Alberta communities with populations of at least 10,000. The vacancy rate for three-bedroom apartments and bachelor units in Lethbridge increased to 1.2 and 1.4 per cent, respectively, from zero per cent. The rate for two-bedroom units improved to 1.2 per cent from 0.4 per cent. Meanwhile, increases in vacancy rates in many other Alberta communities were noticeably greater. In Medicine Hat, the vacancy rate jumped to 4.5 per cent in October from 1.4 per cent a year earlier, while in Red Deer the rate increased to 4.4 per cent from 2.7 per cent. Grande Prairie’s apartment vacancy rate was substantially higher in October at 8.5 per cent compared to 4.9 per cent a year earlier. “I’m excited that we’re starting to see a trend upward, but it’s minimal compared to some of the other (Alberta) communities,” she said. Overall, the provincial vacancy rate increased to 2.5 per cent from 1.6 the previous year. A major factor in the local shortage of affordable rental properties, Randell said, is that in recent years, numerous apartments have been converted into condominiums and put up for sale, forcing tenants to find alternative accommodations. Very few new rental units have been built to replace the lost capacity, she added. The survey includes a comparison of apartment rental costs which indicates rents in Lethbridge, although higher than the previous year, were still about 20 per cent cheaper than the provincial average in October. For example, a one-bedroom Lethbridge apartment cost $719 compared to the provincial average of $887, and a two-bedroom unit in Lethbridge cost $818 compared to the provincial average of $1,077. A local three-bedroom unit cost $886 in October while the provincial average was $1,154. But those survey results don’t accurately reflect local rental costs, Randell said. “We know you can’t get a two-bedroom apartment (in Lethbridge) right now for less than $900.” |
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