1. How much experience do you have & what is the level of your team?
- Comprised with a realtor, financial planner, accountant, lawyer, insurance people, mortgage broker and renovation team.
2. Risk tolerance
- Consist of different levels of risks.
3. How much time can you invest in your investment property & how hands-on will you be?
- Talks about feasibility, talks about logistically close at home. Talking about if you have someone that can handle the stress and projects for you.
4. Time Horizon
- Talks about how long can you invest the money. Property values double every 7 years in Canada. A good 5-year stretch of investment will yield a decent return.
So the first one is how much experience do you have? What is the level of your team? This is very important this is almost the most important thing when it comes to buying an investment property. It is the strength of your team. Your team is comprised of your realtor, your financial planner, your accountant, your lawyer, your insurance people, your mortgage broker, your renovation team if you if you uh get into that kind of property and this is very this is your first step and this is the most important. The second thing you need to consider is risk tolerance. When your real estate is considered one of the safest and most conservative investments however inside of that space, there are different levels of risk. Okay, so, if you're looking at the speculation where you're buying say, land well there and you're hoping for it to develop how much of this how much of your capital is tied up in this, okay, these are examples if you're looking at a flip property you look at a quick turnaround can you tolerate market risks? If you are buying outside of the country can you uh, tolerate financial exchange rate fluctuations. There are varieties that you must also consider. And then number 3, how much time can you invest in your investment property? How, how hands-on will you be? So, this is important because you know if you're gonna buy something 3 hours out from where you are, can you dedicate a day 3 hours of drive there couple hours to fix the issue, 3 hours to drive back. is this feasible? Okay, or is it something you want logistically closer to home? And if none of these work, you prepare to hire a property manager who can handle all of the stress and all of the projects for you. Very important. And the last one we need to consider is a time horizon. How long can you invest the money? Typically, we recommend around 5 years. Because in Canada, every 7 years, you see property values double. So, a good 5-year stretch of an investment will yield a decent return. If you are looking at saying "I have a couple hundred thousand dollars for 6 months" well, you know buying a long term investment is may not be the way to go. Perhaps it's a short term fixed, perhaps it's private lending or something to that effect. Okay, however, it's important to consider your time horizon before you get into this. That's it for now, who you work with matters.