First time Real Estate Investors, often out-of-town seminar grads, come charging into Edmonton and buy where the property is the cheapest.
It’s Cheap for a Reason
I shake my head whenever a client calls to tell me his new property is in East Edmonton. One client bought what he called a “3-plex.” In reality it was a 1935 2-storey house converted into 3 suites. The existing tenant profile included a hooker in the basement, a drunk on the main floor, and the hooker’s boyfriend upstairs. The client was able to get out 18 months later, and made out okay due to the rising market.
The Old Time Realtors chuckle as the new seminar grads arrive to buy the cheapest house they can find. The newbies are repeat business…they’ll be selling again shortly as they try to get out.
First time investors should stay out of the Black Triangle of East Edmonton
In Edmonton, 7 out of 10 of the cheapest listings are in areas like Boyle Street, Norwood and McCauley. They are to Edmonton what East Hastings is to Vancouver.
This can be a great area for experienced investors, but it’s not for the inexperienced. Specifically, avoid the area bounded by Yellowhead Trail to the North, the North Saskatchewan River to the south, 97th Street to the West and ending in Rundle Park to the east. (N.B. North-East Edmonton starts north of the Yellowhead Trail.)
(Chris’s note: It’s really more of a polygon, but
Edmonton’s Black Polygon just doesn’t have the same ring)
East Edmonton is a neighbourhood in transition. There are differing opinions as to whether it’s a transition up or a transition down. This area was a traditional blue collar or working class neighbourhood, and is home to many of Edmonton’s immigrant neighbourhoods. Little Italy, Little Portugal and China Town are all located in this area. There are pockets that are good areas, such as Highlands, but only if you’re very careful.
Currently drug houses and prostitution are two major activities in this area. The police are actively working on the crime issues, and there are a number of initiatives to try to revitalize the area, but these folks will still need somewhere to go, and it’s not perfect yet.
The typical house was constructed prior to World War II, or more than 65 years ago. Foundations run the full range from none at all or dugout basements to brick or rock, and full basements. The cold winters cause freeze/thaw damage; these basements eventually fail, and require major structural repairs. Electrical panels are typically too small and must be upgraded in order to get them insured. Gravity furnaces can still be found, although rarely. Capital Health, the local public health board, routinely condemns homes in East Edmonton, usually citing structural deficiencies.
Wood frame houses in Edmonton typically have a 75 year life span, so many areas of East Edmonton are at the end of their economic life, and the area may become a prime redevelopment zone in the next 25 years. In the mean time, it’s not the place for new investors.
The King of Eastwood
Davies Management & Realty Ltd.