Investing in Real Estate
I get a lot of questions about investing in Real Estate due to my own personal experience. Below are some tips to keep in mind to make investing a rewarding experience.
1. Location counts. If you want to invest think about what the future buyer and renter will want. Most 1st time condominium buyers want something close to town with trendy and convenient neighborhoods.
2. Size matters. This is not always true as most new developments are built with ingenious plans that make small spaces look bigger. The best investment units are studios or 1 bedrooms of 450 to 600 sq ft due to price affordability and rentability. Rental incomes in or near the downtown core are going for $2.00 per square foot.
3. Calculate the per square foot price. As an investor your per square foot price matters. A lot of new developments will sell for slightly lower psf than the existing neighborhood as an incentive to the Pre Sale buyer.
4. Look for quality and reputation. It is important to know the quality and reputation of the developer when choosing between developments.
5. Look for opportunities.
- For Pre Sales, get on the developers list 1st by using your real estate agent to book an early appointment. Your realtor is informed about new developments before the general public.
- Pre Sales 65% sold or more, ask for an incentive to buy .....for example reduction in price or free upgrade.
- Keep an eye out for burgeoning neighborhoods as the perimiter will be the next location to be developed and get in early.
6. Financing options. Explore all your financing options. Is your Mortgage Tax Deductible? Not in Canada unless you learn how to convert your mortgage interest into large, annual, legal and free tax deductions through investing. For more information on the Smith Manoeuvre please call me or Paul Riley, mortgage broker on my links page.
7. Be realistic. When investing it is always best to calculate for the what if's. If you buy a Pre Sale with the intention to assign before it completes and it has not reached the price you want by that time, are you ready to hold onto your investment? Are you prepared financially for the closing costs and can you afford the difference between the rental income and the mortgage monthly payments over the long term.
As noted in the blog entry to follow (BC Economic and Housing Update by Cameron Muirs, Chief Economist) Personal Net Worth is driven by Real Estate. A staggering 42% of our Net Worth is in Real Estate today. With numbers like these it is wise to spend more time making wise informed decisions to improve your Personal Wealth for the future. For Recent Pre Sales near downtown see my Listings Actives and Solds
Please email or call me if you have any questions regarding your next Real Estate investment.