Real Estate Investing

Over the years I have helped many clients through the process of purchasing a property for investment purposes. I’m very interested in this side of real estate, and I pay attention to what works, and what doesn’t. I also find that buyers have particular ideas as to the type of investment property they would like to invest in. Whether it’s a single family home in a regular neighbourhood, a fixer upper to rent out, a duplex, triplex or a student rental, no one method is wrong. There some things that should be thought out when considering an investment property. First, what are your investment goals? Many people make the mistake of looking at the investment over a short period of time. I think you have to consider owning this investment for a minimum of 10 years for the best gain. Not only will you benefit with the rent coming in and paying down your mortgage, your property will also be increasing in value as the market changes and values increase. On average properties go up in value 5% per year (2% right now). In five years at 5% increase every year your $200,000 property is now worth $255,256.31 and ten years $325,777.77. While you are watching your property increase in value your renters are paying down your mortgage. It’s not a bad nest egg or retirement savings plan that cost you a start-up investment of $10,000.

Secondly, it’s also good to pay attention to the area. Which neighbourhoods are in an area of decline? Are there any developments, or road projects that would directly effect the value of the property? Is there an area of improvement that might be worth getting into? I also think that it is important to plan to spend 1% of the value of the property for maintenance and upgrades. We want your investment always looking good. It is a terrible thing when you let your rental go, which affects your neighbourhood and it starts declining, which in turn effects the overall value of your investment.

Finally, what’s stopping you? If you wait a year, you’ve already missed the 5% increase you would have gained. Have your knowledgeable real estate expert get you started.

Check out The Real Estate Renegades for more insight into investing.