Investment Real Estate in Edmonton
"Investing should be more like watching paint dry or watching grass grow. If you want excitement, take $800 and go to Las Vegas." - Paul Samuelson
WHY REAL ESTATE INVESTMENT?
When it comes to investing in real estate, there are no quick paydays. Ups and downs tend to come in arcs and waves not peaks and plummets. Do those happen? Sure. But far more rarely than the stock market. The security of real estate investment is in its tangibility and relative stability, in contrast to the fluid and volatile nature of the stock market. When you purchase real estate for the purpose of renting it, the tenant begins to pay down the mortgage, while, with a little luck and enough time, the real estate market can increase the resale value of the home. This increase, also known as capital appreciation, can be significant depending on the real estate market and the length of time between your initial purchase and the date you eventually sell. When you combine this potential increase with the rent paid towards your mortgage by your tenants, it can create enough equity to attain personal financial security, or even just help create a healthy retirement.
Real Estate Investment is one of those long-game money moves with the rare offer of control that other investing options just don’t typically provide. Can you control the local housing markets or the economy? Of course not. But you cancontrol the state of your real estate investment by keeping the home you buy in good shape, and choosing your tenants wisely. Consider it an investment in which you are both the CEO and the CFO.
WHAT SHOULD I LOOK FOR?
There are a number of important things to be looking for when it comes to investing in real estate, but let’s not forget the all-important potential for “cash-flow.” This is the amount of surplus available after all the expenses have been covered (mortgage/interest, taxes, any utilities covered in your rental agreement, management costs, etc.). Although the potential for cash-flow is an important factor, some properties have more potential for this than others. It may not always be possible until some of the mortgage is paid down and you are able to refinance when your agreed upon mortgage terms come up for renewal with your bank. A realtor who has experience handling real estate investment transactions will understand which properties might cash-flow and review with you what the potential mortgage payments might be versus what your potential rental expectations could be on the various properties you will look at together. Choosing the right realtor is vital because they need to understand that a property may show significant cash-flow on paper, but factors such as: location, condition, and tenant profile can all have the potential to be costly future expenses if not taken into consideration up front.
HOW SHOULD I GO ABOUT THIS?
With all of that power to manage your own real estate investment, there can still be downsides because youwill be the one who will have to plan wisely. Unlike in the stock market, you cannot just completely step back and rely on someone else’s expertise in a field you’d like to invest in- youhave to become the expert. You have to surround yourself with knowledgeable professionals who have an understanding of this type of venture and the challenges you are undoubtedly going to face. The right realtor, the right mortgage broker, the right lawyer, the right management company; these are all integral relationships you have to form in order to increase your chances of return on your real estate investment.
Walking into your real estate investment with the right amount of capital, or an appropriate contingency, or money to float the property if a suitable tenant cannot be found, is also vital when it comes to protecting yourself from the unknown (and inevitable) challenges that investors face in the early days of building their real estate investment portfolios.
Understanding the type of real estate investing is also an important first step before you head out to look at properties. Do you see yourself purchasing and renting out condos or townhouses? Or, would you prefer the idea of single-family homes, duplexes, or suited-properties to avoid dealing with condo boards and having a bit more autonomy? Do you have more of a passion for finding a home that needs a bit of work and then fixing it up for a quicker return on investment? These are all important conversations to have with your realtor before you begin your search.
It is also important for you to understand how you are going to manage these investments. Will you be the one the tenants call if there is an issue with the plumbing in the middle of the night, or will you be hiring a management company to take care of those types of issues? If you are the one managing the properties, then their locations will be the key to avoiding long days of driving around the city to do things like collecting rent or plunging a toilet. Conversations with a knowledgeable realtor will help you to determine which might be the best option for you based on your lifestyle and budget.
Are you a seasoned investor? Or, do you already have one or two investments properties with plans to add to your portfolio? Well, savvy investor, you have come to the right place! Here at edmontonrealestate.net you have the freedom to peruse active listings throughout Edmonton and surrounding areas and request an analysis to narrow your field before you start heading out to view properties.
As a REIN member (Real Estate Investment Network) for almost ten years, and having had the privilege of working with experienced investors from across the country who have chosen Edmonton Alberta as their ideal location to put their investment dollars to work, we have the knowledge and experience to help you accomplish your Edmonton real estate investment goals.
If real estate investment is your goal and you want more information about where to start and why Edmonton is a great city to invest in, or if you are a savvy investor who is looking for someone knowledgeable to help them maximize their investment journey, please don’t hesitate to reach out.
We would love the opportunity to talk real estate investment with you!
“Real estate cannot be lost or stolen, nor can it be carried away. Purchased with common sense, paid for in full, and managed with reasonable care, it is about the safest investment in the world.”-Franklin D. Roosevelt.