Not only has investing in property been the best decision we could’ve made for our long-term future, it’s also working very well for us in the short-term! Even though we’ve added a mortgage and property expenses into our lives, we’ve never had more freedom and flexibility than we do now. We’re able to spend a lot of our time travelling, with income being generated by our properties at home. It’s been a complete game changer, and it’s something that we get a lot of questions about. We’re more than happy to open up about our experiences, and share our advice on real estate investing. Keep reading for our top real estate investing tips!
The Best Time is Now
There are plenty of important considerations when deciding to invest in property. The biggest one being: when is the right time to invest? The reality is, most real estate markets will continue to climb. The longer you wait, the harder it will be to get in. If you continue waiting for the “perfect time”, you might miss your opportunity! The best time is always NOW. Of course you need to consider your financial situation, what type of risk you’re comfortable with, and the market trends in the area you’re hoping to purchase in. When you’re in a good position and see a viable opportunity, jump on it.
We currently own two properties in two different real estate markets. The first property we bought in 2015, a house in Niagara Falls, Ontario. The second property we bought this year, a condo in Vancouver, BC. The reason why we are in this position now, is because Steph first got into the real estate market more than ten years ago. She was encouraged to invest in property young, and she bought a small place in Vancouver before we met. She lived in it for a little while, and then got long-term tenants when she decided to go travelling. Her renters paid down her mortgage while she was making a small profit each month. She held onto the place and rode the Vancouver market up to it’s peak. When she sold, we were able to buy out our house in Niagara Falls so we would be mortgage free, and keep a down payment for the condo we purchased in Vancouver this year. Her decision to get into the market as soon as she could is the reason why we own two properties today. The first leap is definitely scary, but it can help you build an amazing future for yourself.
Leverage Your Investment
The best investment, is one you can leverage. This could mean a variety of things in terms of real estate! You might want to purchase a property with the intention of finding long-term tenants to occupy the space. This way, the tenants can pay down your mortgage and cover your expenses. Depending on the rental market, you may even profit each month in the short-term, and in the long-term, you will also have the property value appreciate! Or, you might want to purchase a vacation home or short-term rental property, with the intention of running a rental business. This provides more opportunity for profit in the short-term, while the property also appreciates over time. If you aren’t able to manage the property yourself you will have expenses associated with property management, but there is still great opportunity for profit. The idea is to have your investment working for you!
When we purchased both of our properties, it was with the intention of leveraging them. In Niagara Falls, housing prices were very low when we bought. We knew there would be a short-term rental market in the area, and an opportunity for appreciation in value over the long-term. The house serves as a part-time home base for us, as well as a business. We’ve employed people to assist with property management, and it’s been a great investment so far! In Vancouver, we got back in during a dip in the market. We purchased in a building that allows short-term rentals, and we also have the option of finding long-term tenants if that ever makes more sense. For now, the condo serves as a part-time home base for us, as well as a business. We know there is a great opportunity for the property to appreciate over the long-term, and we know it’s going to be a smart investment for us. These properties have allowed us to reach our goal of having passive income! If you want to read more about how we manage short-term rentals, you can read this article.
Plan Ahead
The biggest hurdle in a real estate purchase, is coming up with the down payment and getting financing. However, even if it seems extremely difficult, there are things you can do right now to plan ahead and put yourself in a good position. Depending on your financial circumstances, as well as where you are intending to invest, there are a lot of different factors. A good first step is to do your research. Find out what percentage is required for a down payment in your desired market, and develop a savings plan. If you’re not sure where to start with saving, you can read our article about financial wellness. If you don’t think you’ll be able to come up with a down payment yourself, consider a co-investor. If you have a friend or family member that you trust, ask them if they might be interested in contributing on the investment. This can be a great way to get your foot into the market! Of course, always have paperwork drawn up to outline the arrangement, breakdown of ownership, buy out clauses, etc. The next step, is learning about the mortgage requirements in your area, and working to make yourself a better candidate on paper. If you’re self-employed, this might mean claiming fewer expenses at tax time so that your income shows as higher. It might also mean finding a co-signer to guarantee your mortgage. Talk to a mortgage broker, and find out where you’re at. Do a credit report and see if you can eliminate or lower any debts, and raise your credit score. If you’re serious about investing, do everything you can to put yourself in the best position. Don’t be too proud to ask for help!
When we found the perfect property in Vancouver, we had a difficult time getting our financing together. We hadn’t planned on purchasing so soon, and hadn’t prepared the best we could. We are both self-employed and our other property wasn’t factored into our assets, so we ended up getting a co-signer on our mortgage. At the end of the day, our pride mattered less than our determination to reach this goal. We did whatever was necessary, just like you’ll have to.
Do you have any questions about real estate investing that we didn’t address? Let us know in the comments and we’re happy to answer them to the best of our ability!
