Making Real Estate Part of Your Investment Portfolio
If you’ve been thinking about buying a revenue property, there are several reasons why now may be an ideal time.
- The real estate market has slowed considerably and has shifted to a buyers’ market. The opportunities for good deals have never been better.
- Interest rates have also been dropping to historic lows as of late, which should help you more easily obtain financing for your revenue property.
- And although the real estate market slowdown has seen prices drop and interest rates dip, rental income has not wavered – making now an optimal time to start building your revenue property portfolio or continue adding to your existing list of properties.
- During a buyers’ market in the real estate cycle, sellers are far more flexible and willing to work with you because they are most likely not receiving much traffic through their doors, let alone being bogged down with multiple offers. And in cases where a property has been on the market for quite some time, negotiating a sales price should offer you even more added flexibility.
When it comes to finding and choosing a revenue property that meets
your needs the inventory of available properties is plentiful. You
will have multiple properties to look at and not be rushed into making
a hasty decision because a long list of other buyers are ready to make
Another bonus is that, should you wish to make changes to your revenue property, tradesmen who do renovations aren’t as busy as they used to be. As a result, these tradesmen are now answering their phones on the first ring, showing up when they say they will and offering much more competitive pricing.
If you feel overwhelmed at the prospect of becoming a real estate investor, just remember that you’ve already started down that path: you bought your first home! With a little research and careful planning, you can broaden the spectrum of your financial holdings by adding real estate to your investment portfolio.
Helen Burnett, Globe Investor Magazine offers five tips for Canadian real estate investors:
- Study the market
- Never speculate, always invest
- Don’t invest in a property just because it seems cheap
- Follow a long-term system
- Focus on cash flow, not equity appreciation
Before you make an offer to purchase a property, it’s important to evaluate the trends in an area. Ask yourself, “Is this neighborhood likely to maintain its current population, is it on the decline, is it being revitalized?” Determine who your tenants are likely to be and look at market comparables to be sure the property you’re interested in is a good value.
One option you may be considering is to purchase a townhouse or other multi-unit property that is strata titled. This is generally considered to be less trouble for the landlord, as occupants of individual units are jointly responsible for upkeep of common areas and exterior maintenance.
Before purchasing a strata-titled property, be sure the by-laws allow for rental of the units and determine any restrictions such as the number of units that can be offered for rental, pet ownership and the specific responsibilities of future tenants. It’s a good idea to consult an attorney to research the details of a particular strata-titled property because of the variations in structure and details of strata owned community bylaws.
Robert G. Allen, real estate investment “guru” has authored several informative books on the topic of investing in real estate. Whether you’re a beginner or want to expand your current portfolio, he has some great advice. Allen suggests creativity is the most important real estate investment strategy. Some of his suggestions include obtaining seller financing, borrowing against “idle assets” such as a life insurance policy that has cash value, using equity in an existing home or property to obtain down payment funds. While there is inherent risk involved in each of Allen’s strategies, his suggestions just might help you think about some creative financing techniques.
When it comes to investing it is especially important to work with mortgage professionals who are expert in this niche and can provide you with a wealth of knowledge and ongoing information that will help you make informed investment decisions, and feel at ease throughout each purchase. We offer an invaluable service to real estate investors because, if the mortgages on your investment properties are not set up properly from the beginning of each venture, you will not be able to get future financing – a necessity for continuing to build your portfolio of revenue properties.
We can work with you in order to determine where you currently stand in terms of your real estate goals, where you need to be to meet those goals and the steps involved to get you there.
With Averbach Mortgages, what you get is a TEAM of
Because we specialize in helping clients acquire revenue property, we also partner with other investment property experts, including real estate agents, lawyers, accountants, insurance agents and contractors, to name a few, which enables us to provide valuable information to you through the knowledge network we have created.
By forming ties with other trusted experts, we are able to provide you with a one-stop shop for meeting all of your real estate investment needs.
We can also help direct you to other organizations that will offer you further insight into your real estate investment needs. If you join groups such as the Real Estate Investment Network (REIN) or even a local Rental Owners and Managers Society (ROMS), for instance, you can receive a wealth of added knowledge catered to your revenue property needs.
While REIN can provide market insight and investing tips through years of experience, ROMS helps with credit checks for potential tenants, keeps you abreast of changes to the Residential Tenancy Act and other topics/concerns often faced by landlords.
As always, if you want to talk about revenue property purchases, we are here to help. Contact us NOW.
Mike Averbach 604-736-1855
Justin Blacklock 604-736-1855