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!

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When Steph and I met in Vancouver 8 years ago, she owned a condo in a four unit building in East Vancouver, and she was renting it out to a long term tenant. Several years after we moved together to Toronto, the Vancouver real estate market was at its peak, and Steph sold her place. The sale allowed us to buy out our home in Niagara Falls, and gave us a down payment for another investment sometime down the road. At the time, we weren’t sure we would ever want to live in Vancouver full-time again, as we had fallen in love with a life of travel. We owned a home in Niagara Falls that was working well for us, contributing to our income with short term rentals, and giving us the financial freedom to keep travelling. We felt good about getting out of the Vancouver market, but over the past couple years we kept coming back to the question of whether or not we would ever want to own property in our home city again.

We recently started having more and more conversations about what it would look like to buy something in Vancouver, whether or not we would ever be able to afford it, and how we could leverage a property there with the strict rental restrictions that the city has imposed. Even though we didn’t want to move back full-time, we’ve always known that Vancouver is home for us, and we really liked the idea of owning a little piece of our favourite city. It felt like a far off dream, but one that we continually came back to, hoping that it might be possible for us at some point in the future.

At the start of this year, we started paying closer attention to the Vancouver real estate market, as it was dipping into a low. Properties were sitting on the market for months, prices were down and being reduced multiple times before selling, and things had cooled off to a point that we really took notice. We thought that it might be our one and only chance to get back into the market, so we started considering the idea of an investment property. Something small that didn’t need to be suitable for us, and we would just get a long term tenant to pay down the mortgage. We figured it could be a nice way to ride the market back up, and maybe one day we could buy something else to live in ourselves. We started looking at listings online and crunching the numbers to see if it all made sense, and it looked possible.

When we got home from Mexico in January, we decided to go to an open house in Vancouver’s Chinatown neighbourhood, to see a very small condo unit in our price range. On a cold and sunny winter Sunday, we walked over to the building with Steph’s parents to have a look. The unit was nothing special, but certainly nice enough. We knew it would be a fine investment and we could get a long term tenant in there to cover our monthly mortgage and other costs. It was a safe choice, in a great neighbourhood, and it would have a good appreciation in value over the years. We left feeling like it was an alright option, and as we walked out of the building we saw a sign for another open house around the corner. I remembered seeing a listing online for the building next door, and I knew there was a small studio unit that was a similar size and price to what we had just seen. There had been an open house for it the day before, and I figured they must be showing it again, so I convinced everyone to go take a look.

When we walked into the building, it instantly reminded Steph and I of the first building in Vancouver we ever rented in together. It was modern and quirky, and had a great energy. We met the selling agent and wandered into the unit, quickly realizing that it wasn’t the small studio we expected. The condo was a bright and beautiful one bedroom plus den, with huge windows, two balcony spaces, tons of natural light, and a perfect floor plan. I immediately grabbed the brochure to find out what we were looking at, and my eyes darted to the price which was quite a bit more than we wanted to spend. Steph and I walked around the condo both with the same overwhelming feeling of how perfect the place was, and I grabbed her arm at one point to tell her that it just felt like our home. It was one of those moments where it just felt RIGHT. The corner unit was spacious and unique, private and well organized, and it ticked all of our boxes for a place to live. The agent explained to us that this was the third time the unit had been listed, and the price had been greatly reduced. She also went on to tell us that this was one of the few buildings in Vancouver that allowed short term rentals, meaning that new owners could Airbnb the space for a portion of the year. After we heard that, our feelings deepened. This was something we never expected to find, and it would mean that we could leverage the property as a lucrative investment, while also having a part time home when we came to Vancouver. It felt too perfect!

We walked out of the open house chattering excitedly about what a good opportunity this was, how we never expected to find a condo that suited us so well, and how it made perfect sense to buy. We started doing all of the calculations to see if it was even possible. We researched mortgage rates, utility costs, rental rates, and Airbnb licenses, and we spent hours going over everything to continually come to the same conclusion. We could do this. This made sense for us.

The following day we met with our realtor to gush about the place, and explain that we had completely fallen in love with it. He walked us through what we would need to do to make a move on it, and we quickly started gathering everything. The next day we were working on an offer, and that evening we submitted it, knowing that another offer had also gone in. We waited impatiently, so sure that this place was meant for us, trying to squash any doubt in our minds. A couple of hours later, we got the incredible news that our offer had been accepted! We screamed and cried and popped open a celebratory drink, in disbelief that this was all happening in just a matter of days.

After our accepted offer, the hard work really began. We had one week to get our financing arranged, and we knew it wasn’t going to be easy to qualify for a mortgage with the new regulations in Canada. We are both self-employed, and regardless of the fact that we have equity in another home, we don’t necessarily look great on paper. Steph spent days compiling everything we would need, and discussing our options with a mortgage broker. We were willing to do whatever it took, including asking for help if we needed it. We were dedicated to making this happen because we knew it felt right. At the end of the week the mortgage broker came back to us with bad news, and told us that no matter how he looked at it, he couldn’t make it work. The numbers just weren’t there, and the rules were too strict. I fell apart in tears wondering why this would have all happened, only to reach a dead end. I knew we could do it. We knew the place was ours and it was all meant to work out. We had to keep trying.

Later that day we sat down with our personal bank to try and put together an application. We also reached out to our realtor who referred us to a mortgage specialist at a local credit union. We weren’t going to give up, and we decided to exhaust all options before we were ready to admit defeat. We started going back and forth with the bank and the credit union answering all of their questions, compiling all of our documents, and trying to make it happen one way or another. The weekend came and we were waiting for answers, having no idea what was going to happen. On the Monday we still didn’t know. We had a 6pm deadline on Tuesday and it was down to the wire. Tuesday morning we got an email from the bank with a conditional approval. It wasn’t perfect, but it was promising. We could make it work if we had to. We were waiting to hear from the credit union to see if they had better news, but it was getting so close. In the late afternoon we decided we had to move forward and remove the subjects on our offer, deciding that the conditional approval was good enough to go ahead, but we still felt weary. As we sat down to sign the documents, another email came through from the credit union: Approved!

It was the biggest rollercoaster of a week that we have ever experienced, but when it was all over, we had an accepted offer on our dream condo, and an approved mortgage with great terms, despite being told it wasn’t possible. We couldn’t possibly be more excited!

So, what does this mean for us? Well, we aren’t moving back to Vancouver full-time, and we aren’t going to stop travelling. But we are going to have a place that’s fully ours when we come home, and another investment that we can leverage. It’s a new endeavour that will further contribute to our life of adventure! These next few months we are going to find out how we will handle managing three units in two different properties (wish us luck!). We are going to set up our new place, and pour all our energy into making it perfect. We are going to tackle this new chapter, and see where it takes us. We’re so glad that we followed our hearts and pushed ourselves to make this happen. It was a lot of work, we had to stretch ourselves beyond what we thought was possible, get out of our comfort zones, and even ask for help (which isn’t always easy to do). But we’re SO glad that we did, because we know this is what we are meant to do next.

Thanks for reading!

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