Happy holidays everyone. My partner and I are currently shopping for a new home to move into and I am looking at what to do with the house we currently live in, I don't think long term hold make sense for this property so it's between selling it and short/medium term rental. The house is located in Calgary, AB in Legacy. Single attached garage roughly 1700sq. The house was purchased 6 years ago for $415 000 with 5% down. The options I am currently considering are:
- Tenant renting:
The house would not cashflow, rents aren't high enough to cover all expenses as a 1 unit rental and basement suite doesn't seem to be a viable option due to the cost of separate entrance and layout of the house.
- Short term rental:
Listing the house on Airbnb and other short term rentals sites or executive rental. This could provide enough cash flow go cover all expenses and hopefully be cash flow positive, it would also provide me exposure to short term rentals. I'm not sure the location would be ideal, it's closed to spruce Meadows in the summer but that's about it and limited transit.
- Rent to own:
This currently seems to be my best option so far, it seems like it would allow me enough income to be cash flow positive while selling the house with less fees? (Aka realtor). This would also give me exposure with something I have been wanting to learn more about.
- Selling it:
I would likely get around $420-430 000 minus fees (realtor, lawyer etc). Any left over equity would go toward acquiring another rental property.
What are your thoughts?
You can RTO, but you don't "need to do it" to get exposure to it. Also, RTO is risky (50% success rate), so unless you know the strategy or hire a firm to help you, I would suggest you stay away from it. I have a contact in Calgary that does RTO.
Your other option is to do an AFS (Agreement for sale) or do a private sale (this way you don't pay RE fee).
Run your #'s properly for short term. They are a lot of work. Unless you sub it to someone to do.
Send me a message if you want more info on any of the above.
Check AirDNA to make sure your area of Calgary has a viable STR market.
Maybe rent it out by the room? Are you close to hospitals, universities, office parks, or places with high professional traffic? You could rent to professors, nurses, engineers, etc.
Is the layout easy for seniors to navigate without assistance? There's a growing need for senior co-living that isn't assisted living. You'd look for folks who are downsizing, who may have lost spouses, but are still able bodied.
By 50% success rate for RTO do you mean that 50% don't end up in a sale? I'm not concerned about the sale not happening as long as cash flow is good I don't mind repeating the RTO process a few times for eventually have it work.
Unfortunately I have none of those features and bad layout for senior (thanks for the suggestions though)
Do you find airdna has reliable numbers? I have been looking at getting numbers
I don't have any STRs, so it would be better to hear from someone who uses it, but I know many investors with AirBnb's in Ontario and all of them rely on AirDNA.