Investing in residential real estate can be rewarding. It can also cause headaches and can even be financially detrimental if you don’t give it the proper amount of thought and consider all the pitfalls before you invest your hard-earned dollars.
In order to ensure your investment helps you effortlessly make money over time, and doesn’t become a money pit, take these 3 tips from real estate investment expert Riaz Ghani, who has been helping clients buy and sell properties in Mississauga, Oakville, Brampton, Milton, Toronto and across the GTA for more than 10 years:
1. Pick a property that offers good value for your money: Though the location, price tag and rental income might look attractive, you have to consider the cost of upkeep when purchasing an investment property. One major thing to avoid? Buying the most expensive home on the market in the most expensive neighbourhood, says Riaz. While an expensive home will command more rent, it will also inevitably cost more money to maintain, says Riaz Ghani Ghani. A better option? Choose a property where you can get better value for your money. Extra points if you can also find an agent who can manage your property free of charge. Riaz and his team have developed smart processes and use cloud-based apps to help landlords address property maintenance-related issues in an efficient and effective way.
2. Community matters: When buying an investment property, you need to understand the local market and what potential tenants in these markets want from a rental property. In many regions of the GTA, for example, the rental market is driven by immigrants, says Riaz, adding that schooling is very important for this segment of the population.
“They’re looking to create a better life for their kids...so school ratings are important,” says Riaz. “We don’t buy properties in bad school districts.”
Another important factor to consider is the commutability: much like buyers, renters also prefer properties that are in close proximity to major highways, Go Stations and subways.
“Before the property comes the community you want to buy into,” says Riaz.
Choosing a high-quality community gives you access to high-quality tenants and also makes it easier to sell your property when the time comes.
3. Ensure you get enough rent to cover recurring costs: Ideally, your investment property should increase in value over time. But what about all those recurring costs, like repairs and property management fees? Everything should be covered by rent, says Riaz Ghani. When helping clients purchase properties, he aims for a rental yield of 4 per cent per year — which more than covers any and all costs that come up. This can be achieved by seeking out quality tenants with a higher income level who are willing to pay a premium, he says.
Want to know more about investing in the GTA real estate market and, just as importantly, finding a property that will make money and be easy to rent? Reach out to Riaz and discover why he is known for his honesty, integrity and professionalism.