Home auctions in Calgary, overnight line-ups for condos in Vancouver, and bidding wars in Toronto – it seems everyone is after real estate these days!
Real estate investing is a great way to make money, but it is not without the pitfalls. In five short years and eleven purchases we have dealt with a property manager on trial for murder, tenants with knives, fire code inspections going all wrong and so much more.
It hasn’t been easy money for us, but we really didn’t know what we were in for when we started. Knowing what your goals are, your risk tolerance and what the pitfalls can be will help you prepare for the adventures in real estate investment.
You might have noticed the large number of wealthy Canadians in the Canadian Business Top 100 that made their money through real estate development or investment, and you likely have wondered if it is right for you (especially if your RRSP’s have been doing poorly!).
Real Estate over the long term, has always been a sound way to build wealth. But, it is not for everyone. Take our short quiz to find out if you are ready to invest in a rental property, or if it just might be too much to handle right now:
- Do you enjoy looking at houses (either online, on walks, in magazines or newspapers, on drives, or in real estate office windows)?
- Do you have any spare time during the work day to handle the odd real estate issue?
- Do you have a strong and supportive relationship with your partner/spouse (if applicable)?
- Do you have extra money at the end of the month after all expenses are paid?
- Do you know anything about mortgages, tenant and landlord legislation, or home repairs?
If you answered no to all of the abovequestions, then real estate may not be the place for you to invest in right now. If you answered yes to more than two of the above, then real estate may be a good option for you to grow your wealth.
Over the coming months we will share stories of how we were fined thousands of dollars, how we evicted a tenant, how one of our property manager’s stole money from us, and the strain these situations have put on our relationship, financial resources and time. In those stories we will also tell you where we have made money, and continue to succeed, as we want to share the things that have worked as much as those that have not.
Published April 17, 2006