A lot of people have heard that owning real estate is a great way to make money. They look at famous tycoons such as Warren Buffet and think, I can do what he does. There is a great temptation to buy a few condos or houses and start out on the path to millions. The question to ask is, do you really know and have what it takes to become a landlord as an investment strategy?
Before we get into the basics, it is important to note one thing: moguls like Donald Trump has been bankrupt at least twice, and there have always been questions about how solid and vast his empire really is. That's right, the man who is the poster boy for real estate investment has failed, big time, repeatedly. That should be enough to give anyone looking to make a fortune off off real estate pause for concern. It shows that owning property is no quick or easy way to riches, and that is proven even more true in today's economy.
In order to make money by investing in real estate, you first have to be willing to part with money. You have probably already noticed, but real estate in this city and other major cities, where your chances of making rental income are far greater than anywhere else, is quite expensive. Potential landlords have to find the right property at the right price, and this means looking beyond the usual avenues taken by people when they purchase residential real estate. It is also important to take advantage of every opportunity for cost savings along the way - be sure to investigate any tax programs in your area, such as the HST rebates that are available on certain rental properties in Canada (see details here).
So, the first thing you will need to commit to your investment in condominiums is time. Make no mistake about it, real estate ownership is not a passive investment. This time commitment will be ongoing, as you look into which properties provide good return and then when you start to manage the properties yourself. Right at the beginning, though, what you will need to determine is which properties can net you the best rents, without cutting into your profits.
A good way to find out if you have what it takes to succeed as a profitable landlord is to start out with just one rental property. That might be a condo or a building in a set of townhouses. Either way, owning just one rental property will help you learn the ropes of rental ownership. You will quickly realize what kind of legal considerations there are, the expenses involved, as well as what it takes to attract renters to the property.
The main thing to keep in mind as you consider investing in real estate is that the venture is not as easy as it might seem at first. Be prepared to commit a significant portion of your time and money if you want to succeed.