I have been a real estate investor for 8 years now and have been through the good times and the bad times and I have learned a lot.
Being a landlord is hard work, it is a job and if you already have a job it’s even more complicated because issues usually come up at the most inconvenient time. I have had my share of problems lately but I must say that with the financial meltdown occurring throughout the world, I am falling in love with real estate all over again. A house is something tangible, if you can’t sell it, you can rent it.
Many of us have watched our investments and retirement savings almost being cut in half over the last few years and as soon as things looked like they might improve we are hit with another world wide crisis that we have no control over.
During the good times, buying real estate was very easy as the value often kept going up and you could then re-finance the property, take the equity out and use that as the down payment on the next house and so on. That is not as easy now as banks are now more careful and have tightened their lending rules but if you have good credit it is still possible.
The single most important thing is to recognize when opportunity knocks, there are lots of houses being sold below value for various reasons (divorce, job transfer or estate sale) and it is often said in real estate that you make your money the day you buy.
The second thing to keep in mind that it is a business and must be treated as one. Document everything, keep track of expenses which are tax deductable and respond to tenant’s issues immediately. If you are flipping a house, have a budget from the start and stick to it.
You can still keep building your real estate empire once you have reached your credit limit by getting a partner or by getting a private mortgage from the seller. This is a business with endless possibilities and a business that anyone can enter if the desire and commitment is there.
Our goal was to buy a house every year for 10 years and then upon retirement, selling one every year for ten years but that didn’t quite work out unless we count one 8-plex as eight purchases, then we are ahead of our own schedule.
I could write a book about what to do and what not to do but as there are many on the subject already, I may yet do this myself. One of the best in my opinion is “The Guide to Real Estate in Canada” by Don R. Campbell.
If you want to talk about real estate, please contact me at ullameredith@gmail.com
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