Hailey Doney, a 27-year-old geologist living in Calgary, just bought her second home this past September. A few years ago, she purchased a townhouse just outside of the downtown core that’s now her first rental property.
Her two-bedroom, two-bathroom condo cost her $370,000 and is located in the heart of downtown. She was able to put down 27%, which meant her mortgage on her second property was $270,000. It also meant that she didn’t have to get mortgage default insurance, which can be a huge additional cost for many homebuyers.
Doney purchased her second property as a way to diversify her investment portfolio. At the time of her purchase, the economy in Calgary didn’t seem great but she definitely didn’t think it would get as bad as it is now. Her ultimate goal is to own a number of rental properties and be able to live off of the passive income they produce.
She used a mortgage broker for both properties she owns. Doney has a three-year fixed-rate mortgage of 1.95% on her condo and she was able to get a five-year variable-rate mortgage of 2% on her investment property.
Purchasing her second property didn’t come with an emotional attachment. Doney scoured the market for a year and a half, looking at more than 50 condos until she decided on the one she’s in now. She was able to keep her emotions at bay because she already had a place to live and wasn’t in rush to find a place.
“There were a lot of overpriced places a year before I bought and if I had jumped into the market then, I’d be underwater on my condo now,” Doney explains.
The fact that the Calgary market has turned from a seller’s market into a more of a buyer’s market also allowed her play the waiting game. It was easy to get a good deal by looking at comparable condos on the market. The condo she ended up purchasing, which she found on Realtor.ca, was listed for just two days and was priced to sell.
Purchasing a second property can be a big undertaking, especially when the buyer is young. “But I had a really good mortgage broker who shopped around for me and was able to negotiate a good rate on my behalf,” she says.
At the end of the day, Doney is pleased with her condo purchase and hopes to eventually rent out both of her properties. She checks Realtor.ca regularly to keep track of the housing market in Calgary and to get an idea of what she might be able to receive in rent in the future. Her long-term mentality is helping pave the way to retirement and at a very young age.