I am obviously a huge proponent of real estate investing as a method to grow your wealth.
But it truly is a business, and just like any other business it has the good and the bad!
-You have a product that is extremely in demand (if you have a good property in a good area) where your customer cannot live without your product (no pun intended!) so much so that they live in it! And there is a line up of customers (tons of rental applications come pouring in if you have a desirable property!)
-You have a recurring source of income, your tenant pays you each and every month and sometimes for years on end – not to mention the mortgage paydown
-The value of your business continues to rise year over year (even though there may be some dips here and there)- the Canadian market has a history of growth for long term buy and hold investments
-It is easy to liquidate – you put it on the market and it sells fairly quickly if priced right (conventional business’ are difficult to sell)
Of course if you ask me – the good outweigh the bad.
But like anything – there are challenges in this business!
Last week we got the dreaded call that one of our triplexes has bed bugs – in all 3 units! The price tag to exterminate – a whopping $1000!
We also got a call where one of our brand new basement apartments has condensate forming on all the vents every time the AC is used. Even the drywall is getting wet. We have to send it an HVAC expert to investigate.
And the mortgage rules – don’t get me started on the hoops that we have to jump through consistently to get financing.
But we have dabbled in some many other businesses. From online e-commerce platforms to a few brick and mortar retail ventures we have run – the reality is that making money through any kind of business is HARD WORK. Not only that, it is filled with setbacks and challenges, and the money does not come pouring in.
In fact, when we started out, they told us that the average business takes 5 years before you start actually making money!
The cool thing about real estate as a business – well most likely you will start making money within the first year. Maybe not tons of cash flow, but overall your business in a box will be working well if managed correctly.
Of course there are going to be setbacks, unexpected expenses – those dreaded repair calls and unexpected vacancies.
But eventually it will be more gain than less, more success than setbacks!
And for those of you still sitting on the sidelines – what are you waiting for?
So until next time, happy Canadian Real Estate Investing.
Jose Jafferji, REIA
Your Real Estate Investment Advisor, Coach & Realtor