Real Talk!

We’ve all seen those late night infomercial testimonials from folks who have gotten rich, buying rental properties, with absolutely no money out of their own pocket…. And it isn’t all mistruth…

It can be done… and it’s also true that seven out of 10 Canadian millionaires have made their wealth through real estate investments. And, in some cases, by simply buying real estate at the right time, at the right location and at the right price.

But…(there’s always a big but)… we must remember that the first rule of real estate investing, even ahead of location, location, location, is to know the people with whom you are dealing. &, Even that is risky business. No real estate "system" is foolproof.

Building an inventory of investment property is not for the faint of heart. In order to accomplish a “no-money down” purchase, you must have good credit, a good & stable income AND usually, a home that you already own and occupy. Then, you also have to be prepared to become a landlord.

There are many considerations you need to make before you become a landlord including (but not limited to):

- How are you going to screen prospective tenants?

- How much of a return do you expect? In what time frame?

- How are you going to screen prospective tenants?

- Are you going to manage the property yourself? Do you have a plan to save for and set aside the costs of maintenance?

- How are you going to screen prospective tenants?

- Are you familiar with the applicable laws? The “RESIDENTIAL TENANCIES ACT? Local Building By-laws? Safety regulations?

- How are you going to screen prospective tenants?

- Have you set up a plan to save and set aside property taxes? What about OTHER taxes?

- How are you going to screen prospective tenants?

- Have you investigated appropriate insurance coverage?

Don’t get me wrong, being a landlord can be profitable- if you have the right disposition and a good bit of luck, you can create and maintain a decent income stream… but those late night infomercials are created (at significant cost) by people selling a video, a book or a seminar. That is how THEY make money.

& Those 7 out of 10 millionaires? Most have made their money through prudent, well-planned investments… by buying real estate at the right time, at the right location and at the right price.

Infomercials are designed to appeal to the sensibilities of viewers. They play on our desire to earn and promise that the secrets of THEIR system can delivers us from debt and magically transform us into millionaires. Usually, there’s a push to act quickly… a hook… perhaps a warning, this is the last chance! & Then, there’s often a nice bonus promise… book now and receive a free pen!

&, Perhaps even worse… some tell you that their seminar is free. They fail to mention that you have to buy the course materials, in order to attend.

How many times to do we have to be told, “if it seems too good to be true”… “It probably is”?