A lot of people think that real estate investment is simply passive investing. On the face of it, it appears that way, but most successful real estate investors take command of their investment. Firstly, by acquiring knowledge and creating alliances or a 'team' to work with. Before plunging into residential rental property investing, I recommend that you read, understand and know all facets of the Residential Tenancies Act (in Ontario, similar in other provinces or states) its quidelines and methods. Anything you don't understand you should call the bureau involved and ask questions. If it's a legal question, ask a lawyer who specializes in this type of property law. If it's a real estate method of procuring, divesting or renting this type of property, consult with a seasoned agent who is highly conversant and experienced in this type of property.
Okay, now you're set. Have your agent show you some various listings of the type and in the area that you are interested in, and explain the advantages, disadvantages and types of return to expect. It's not good enough just to have the return stated in a simple fashion as 10% positive cash flow or the like. You need to know a lot more, and it's your responsibility to learn more. If you aren't getting the answers you need to make a logical buying decision, find someone who will get them for you.
Before you even look, though, you need to align yourself with a good lender or mortgage broker and go over the plan you have for investing in rental properties. Find out what financing options are available to you, alternative options and rates, conditions and special privileges.
You should already have been working hand-in-hand with your tax accountant and lawyer to ascertain the best methods for taking ownership to save you tax monies and increase write-offs.
Now you're ready to call that agent back and start looking into the market in earnest!
Happy Hunting!
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