Real Estate Investing might not be for everyone!
We want to help you buy and enjoy owning many income properties, but you should decide if it's for you and we put together this video to try and cover the main points of owning investment real estate.
0:00 - 0:30 Introduction
0:30 - 0:59 Real Estate is not a Liquid Asset
0:59 - 1:49 Real Estate Investing Ties up Cash
1:49 - 2:02 Landlords Have to make the Tenants Pay
2:02 - 2:12 Mostly in Tenants Favour
2:12 - 2:24 Lots of Stress being a Landlord
2:24 - 2:50 No revenue some months
2:50 - 3:05 High Turnover High Vacancy
3:05 - 3:16 Do Your Due Diligence
3:16 - 3:39 Know the Laws
3:39 - 3:51 It is Expensive to own real estate
3:51 - 4:06 Devil's in the Details
4:06 - 4:32 You will be wearing many hats
Here are 12 reasons NOT to Invest in Real Estate.
1. Real Estate is not a liquid asset, it can take time to list, sell and close to receive your cash back compared with Stocks, ETF's etc. which can be sold in minutes.
2. Real Estate Investing can tie up enormous amounts of your cash. As an example, a 2-4 unit building at $1 Million could tie up 40% downpayment of $400,000 plus closing costs of 1.75%, or $17,500. Right there you have $417,500 of your cash tied into this investment.
3. Landlords have to make sure their tenants actually pay their rent and will have to deal with non-payment of rent.
4. Mostly in the tenant's favour. Right now, if a tenant does not pay their rent it's taking between 4-8 months to evict them.
5. Lots of stress being a Landlord, having to deal with noisy tenants or conflicts with each other, it is a personal business.
6. Some months you could have no revenue due to vacancies, damages and repairs.
7. Revolving door of tenants when there is a high vacancy rate you will see higher turnover of tenants.
8. Make sure that you do your due diligence when screening prospective tenants up front, check with previous landlords and do credit checks.
9. Knowing the Landlord Laws, you should read all you need to know about the Rental Tenancy Act as well as the Rental Tribunal Board. You should also know how to read a lease as well as N Forms.
10. It's expensive to own real estate. It's important to take care of your asset with good ongoing maintenance.
11. The devil is in the details. You need to be well organized and have separate accounting from your personal finance.
12. You'll be wearing many hats when you own real estate. It can be a time consuming job when you have to maintain and repair the property, show it to tenants, mediate disputes, perform book-keeping and accounting.
If you have decided that you do want to own real estate as investment, have a look at all the income properties available in the Ottawa area