One of my specialities is helping people build their their real-estate-investment portfolio. Because I'm in the business of owning and managing rental properties myself, most of my clients appreciate the fact that I have first-hand experience of what to do (and what not to do). I've made several mistakes over the last ten years where I've lost money, but I have also had several success. I'm proud to say that I'm finally making a decent profit.
I love Don Campbell's quote from the Real Estate Investment Network (REIN), "Real estate is not a get-rich-quick-scheme, it's a get-rich-slow-and-steady strategy".
Here are some typical reasons people give for buying a rental property, that may be the wrong reason for purchasing (I'd love your feedback):
1. I want to supplement my income now. If you purchase a rental property and need to put a mortgage on the property to 80 per cent of it's value, you're likely not making more than $500/month on it. I'm referring to the marketplace which I know best KW, Cambridge, Guelph, Brantford, and Niagara.
2. You want passive income. Owning a rental property is not a passive business. There's allot of work that goes into managing a property and making money. Depending on the property, it should take you an hour each week BUT you need to do some work each week per property.
3. You're retiring in a year. If you're retiring shortly and you're looking for something fun to do, then a rental property may be the way to go. I've also helped retires buy properties to leave a legacy for their children. If you have money to invest and want to make a "dividend" or supplement your monthly income, investing in a private mortgage is a good alternative.
1 comment:
For many individuals, buying a home is the largest investment they'll ever make other than paying for college and buying a car. While monthly rent payments may be less than what a person would pay toward a mortgage, it is the landlord who gains an asset from the property rather than the tenant. When considering reasons why home ownership is preferable to renting, think of how owning property will affect you financially and how it'll impact your quality of living and lifestyle.
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