Starting out most of the real estate investing basics that I was exposed to around single family home investing was this:"You, the investor, pays for the mortgage, insurance and property taxes. The tenant renting from you pays rent and utilities."

When starting out you want to pick an investment type that works for you and move you towards your real estate investing goals.

For example, single family home rental properties will work best in blue collar neighborhoods. By "work best" I mean that you'll get more people calling you for this type of property than if you do a single family home rental property in a higher end area.

Of course you can still rent out properties in upper class neighborhoods. I know people who successfully do it. Just understand that you're appealing to a specific segment of the population so the number of people that call your ads will be less.

So as long as you're prepared to carry the property yourself longer than you would a smaller starter home you'll be fine.

The real estate investing basics around the returns you can expect to generate from your investment are as follows: regular single family home investment properties purchased in the right area can produce cash flow, equity build-up (from the tenant paying down your mortgage), tax benefits and appreciation.

                                              Duplexes & Triplexes:

You can't have a conversation about real estate investing strategies and not bring up duplexes (2 apartments in the building) or triplexes (3 aparments in the building).

Many investors begin their residential real estate investing by buying a duplex and living in one of the units (perhaps on the main floor) and renting out the basement.

It's a great way to supplement your income and have someone else contribute to your mortgage payments!

Duplexes and Triplexes exist in almost all but the very smallest Canadian cities.

Legal duplexes and triplexes have the proper permits and have separate meters for things like water, gas and hydro.

There are many duplexes throughout Canada which are non-conforming, meaning that someone is renting out a section of their home (likely their basement) but doesn't have separate meters for the unit.

Duplexes and triplexes can be a part of your real estate investing strategies. The cash flow from the units is often enough to cover your monthly payments (mortgages, property taxes and insurance).

And if one of your tenants leaves the revenue from the other tenants can help offset the temporary loss in revenue.

Student Rental Properties

When you are going to learn about real estate investing you definitely want to hear this debate...

You'll hear two drastically different sides when chatting about student rental properties.

There's one group of investors that absolutely love them. They are the be all and end all of their real estate portfolio and nothing can come close.And then there's the group that has owned them and will never touch one again!

Most student rental houses cash flow extremely well. Because you may have four, five, six or seven students sharing one house your monthly rental income is nice and high. So with nice high cash flows some investors are attracted to these homes.So what's the other side of the coin?

Student rentals require hands on management. Compared to regular single family home rental properties these have more maintenance issues and sometimes awkward vacancy challenges. With so many people in one house the wear and tear is pretty high on student rentals.

Another thing to keep in mind when you learn about real estate investing is how you will handle vacancies. And if one student can't stand another after a few months they may just pack up and leave. The rent on that one room may be the difference between having a positive cash flowing property and a negative one. It can be difficult to find a student who wants to move into a house where they don't know anyone, right in the middle of a term.

You can get a good idea about the prices paid by students for housing by checking out the college or university housing website. They all have them.... click here for an example of the McMasterUniversity's in Hamilton, Ontario.

Financing & Insuring student rental properties in Canada have gotten more difficult. You have to put much more as a down payment and some banks just flat out refuse to finance them. And if you want to refinance the property it can be more difficult because of what it is being used for.

Something to learn about real estate investing with single family homes is that when they are rented out as single family homes they can be much more flexible to you from a resale and refinance perspective.

                                    
                        Don't Want to Be a Landlord?

When chatting about real estate investing strategies I often hear, "But Jimmy I don't want to be a Landlord".

Question for you. Why not? What else can you buy using leverage (other people's money - namely, the bank's) and have the people who live in it pay for it? And you get to keep the thing. I mean, this is a beautiful real estate investing strategy. Wealth is built by controlling assets and controlling the cash flow yourself. Not owning a small stake in them. Remember that.

Warren Buffett, one of the most successful investors of all time, didn't get to where he is by having small stakes in his purchases. He is an active investor.

He may have other people running the show at a particular company, but he is active in that he controls the companies he purchases. I know everyone has a story of how it took someone they know six months to evict a tenant. Well, I challenge you to get the details. They likely didn't take any action. Don't let your real estate investing strategy be one of the excuses that stop you from getting started.

And ask yourself this. Think of the wealthiest people you know, do any of them own real estate? Bet they do.

If you live in the Greater Hamilton Area you can come Visit me in-person for a No-Obligation Consultation on "How to Invest in Nice Homes in Nice Areas". We will go through the steps in this real estate investing strategy guide in more detail and discuss the very latest investing strategies and advice. Call Jimmy Today !

 
905-575-5478 (Hamilton Area)
905-639-5258(Burlington)

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