Real Estate investing can be very profitable if you make the right choices and take the right steps. However, it doesn’t take a seasoned pro to come out on top. Just follow this real estate investment guide to get the info you need to turn your property into a profitable return-making machine.
Diversify In Different Markets
Rule number one – diversify your assets by buying properties in different regions. Why? Because not all Canadian real estate markets are in the same cycle at the same time. Better put, markets could be booming in the east but declining in the west. When you diversify, the properties you own in areas that are recovering and emerging will balance those in decline and prevent you from losing money or even going bankrupt.
Don’t Over Leverage
Financing your properties can prove valuable when mortgage rates are at an all-time low, and rental rates remain high. However, if you are leveraged to the max and the market softens, or the property doesn’t appreciate at the rate you expected, or the BOC pushes the interest rates up, you could find yourself in a sticky situation. Before you leverage any property, first talk to a professional who can help you determine if your projected cash flow will be enough to keep you afloat in the “worst-case scenario.”
Hire A Property Manager To Reduce Risk
Poor tenant selection, long-term vacancies, tax infractions, and high maintenance and repair fees can put a real dent in your profits. If you have little experience running an income property, it’s essential that you hire a respectable property management company to run it for you. They will mitigate your risks by ensuring that your property is always filled with high-quality tenants and that your books are kept up to date and your property in good condition.
Have An Exit Strategy
Do you know what you plan to do with the property in one year, five years or ten years? Successful investors always have a business plan in place that ensures they will profit when exiting. Having an exit strategy prepared can help you act fast if you need to liquidate suddenly or if one of the properties are not providing a return as expected. However, it’s important to point out here that not all exit strategies are equal. There are several exit strategies you could take on – seller financing, leasing, flipping – and choosing the right strategy for your business plan will determine your success.
Hire A Lawyer
A lawyer can do much more for you than helping with the contract issues, the transaction process and drafting tenant leases. Complex sales and purchases often come with potential legal and financial issues. A lawyer can help you navigate through any unfamiliar waters and also protect you in the case of a lawsuit or tenant issues. Having a dedicated lawyer by your side will ensure your interests and assets are protected, and your profits are kept in your pocket.
Don’t leave your investment to chance. With the guidance of a real estate lawyer, you can ensure that your biggest investments and profits are protected. When you need a legal team on your side, contact us at Accord Law. Our firm will go the extra mile to safeguard your assets and guide you on the right path.