Location, location, location. We’ve all heard the saying, but do we really understand the level of importance behind it?
Like it or not, it’s one of the most important factors in real estate investing because it directly affects a property’s income potential, value growth, risk level, and long-term demand. Unlike the property itself, location cannot be changed, meaning investors need to pay close attention to it before making a buying decision. Margin is created at the purchase not at the sale. The ability to execute, stay in liquid markets and control costs is what preserves and protects that margin.
The Reasoning Behind Lending Parameters
Our goal is to ensure that you have access to financing where opportunity exists. This means reducing the risk of purchasing a property that won’t create profit when it comes time to sell, refinance, or rent. It also means easier access to financing and potential for more substantial returns. Some of the main reasons why it’s important to choose a desirable location:
- Rental demand and income: More desirable and populated areas attract more tenants, creating more demand. This reduces vacancy rates and increases rental premiums.
- Property value appreciation: Good locations with retail, services, schools, and other amenities tend to increase property value over time faster than less developed areas.
- Economic and employment growth: Populated areas have a higher chance of economic growth, which results in appreciation in the region.
- Exit strategy and resale demand: A desirable location makes it easier to sell the property later.
- Market stability: Being located in higher-populated areas reduces the chance of having volatile market swings.
A Comparison of Two Locations: Airdrie vs Didsbury
Two real estate investors purchase identical duplex properties in Alberta. The only major difference is location. One property is located in Airdrie, while the other is located in Didsbury.
At first glance, the investments may appear equal or even favorable to Didsbury on the purchase price. But over time, the Airdrie property is likely to outperform the Didsbury property for several reasons.
Stronger Population Growth
Airdrie is one of the fastest-growing communities near Calgary. Its population growth continues to drive demand for housing, rentals, and new developments. Didsbury, while a great small town, grows at a much slower pace. Lower population growth usually means lower long-term housing demand.
Proximity to Calgary
Airdrie benefits heavily from being only minutes from Calgary. Many residents commute to Calgary for work while choosing Airdrie for more affordable housing and a family-friendly environment. Airdrie offers many of the same amenities and conveniences as Calgary, but in a less densely populated setting. Residents can enjoy similar big-city vibes while benefiting from more affordable housing options and a stronger sense of community.
This creates:
- Higher rental demand
- Lower vacancy rates
- More buyer competition
Didsbury is located farther north, and even under non-rush-hour conditions, the commute to Calgary takes about an hour, making daily travel less practical for many workers.
Higher Appreciation Potential
Because of continued development, infrastructure expansion, and population growth, Airdrie properties often experience stronger appreciation over time.
An investor in Airdrie may see:
- Faster property value growth
- Easier resale opportunities
- Stronger long-term equity gains
Didsbury properties may still appreciate, but typically at a slower rate due to lower market demand.
Better Rental Pool
In Airdrie, investors can attract:
- Calgary commuters
- Young families
- Professionals
- Long-term tenants
This larger tenant pool helps maintain occupancy and supports stronger rental pricing. Didsbury has a smaller rental market, which can sometimes lead to longer vacancy periods and fewer tenant options.
Where Calvert Home Mortgage Investment Corporate Lends
We provide funding across Alberta and Ontario in the following areas:
- 100k+ population, or 25km driving distance within these city limits
- 50k+ population, or 10km driving distance within these city limits
- 10k+ population within city limits
- Certain rural areas*
*Due to greater volatility in demand and value of rural land and small town properties, we reduce the allowable Loan to Value (LTV) in these areas. Increased rates and fees will also apply.
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