Investing in real estate is an alternative to investing in the stock market. We are in a buyers market with the number of available listings at all time highs. Now is a great opportunity to take advantage of this situation as prices will eventually start to rise, and you may miss out on a fabulous opportunity to pick up an affordable investment property.
When should you start investing
If you have enough cash saved up for a down payment, and have made your calculations on revenue and expenses, make the decision and let an experienced real estate advisor help you make the right purchase.
What you should consider before investing
Neighbourhood – Make sure you understand the neighbourhood you plan to invest in. Working with an agent who knows the rental market and future city planning will help you figure out long-term rewards when it comes to future resale and rental rates.
Your cash flow situation – Have enough reserve for at least 5 years. There are opportunities where there is positive cash flow from the time you invest, i.e. the monthly rent is greater than monthly cost. Others may take longer before you start getting a positive cash flow, and you should be well aware of this. Make sure you have enough cash in reserve to cover any unforeseen contingencies and cover deficits.
Your time horizon – Are you in for the long term or short term? A short-term situation can arise when you buy into a presale, and sell on completion of the project. Hopefully there is an appreciation in the price of the property giving you a net increase. Investing in an older building is the long-term approach. This will give you a regular and steady monthly rental income and appreciation in a rising market.
Understand the strata documents – Not all stratas are managed the same. You need to be familiar and comfortable with how the strata is run and the bylaws governing the property. An experienced realtor will be able to guide you properly in this process.
Know your renter – if you want to target young professionals then invest in a property with easy access to transportation, shops and restaurants. If you want to target students, invest in a property close to a college or university. In all situations you should be aware of your target market.
We are currently in a buyer’s market and an experienced real estate company that has been in business for over 2 decades such as ours, will be able to guide you efficiently and effectively towards your investment goals. Contact us and one of our experienced professionals will be able to answer all your questions and concerns. Check out our number of very attractive investment properties for sale here.