Why condo investment is by far your best solution
I was pondering/contemplating/thinking about the income property business this morning (contrary to popular belief I do think from time to time) after speaking to a client, and I thought about two categories in particular: the new investor, and the professional investor.
Both groups have a similar problem: getting an investment portfolio going. Career oriented professionals cannot afford to have me “sell” them a second job. New investors have generally had an inability to get over fears and concerns of investing, as for the majority it is the first time in their lives they have taken a calculated risk with their money, and it is completely natural to dither as a result. It pains me to see how some of you are now entering year 2, year 3, year 4, have all the investment knowledge in the world – and still don’t own an income property.
Why I write is because there is a viable solution that we have been using more and more; condo investment. They are by far the safest investments, have by far the lowest time commitments, have the best residential tenants overall, are easy to obtain financially, and have by far the lowest maintenance costs.
In a nutshell – I refuse to over complicate such a simple concept – what we’ve been doing is selling 1 or 2 bedroom condos in the better/best run condo buildings, which my associate Brian Peltier and I have already identified for you. We then fill them up with a tenant; condo tenants are virtually always one of three classifications. Professional student (think law, MBA, graduate studies etc.), young professional, or retiree. These are the folks that give you 12 post dated cheques, shake your hand and say “see you in a year”. Because it’s their own home they generally upkeep the property very well, even taking care of the smaller repairs. I’ve seen many condos handed back to the owner in better condition than when they leased it out; it’s not an unusual phenomenon at all. Financing is generally 95% loan to value on the first one, 80% loan to value on the remaining ones. However, we’re finding that enough vendors are willing to hold a 2nd mortgage to help out with that heftier down payment, or get a line of credit of course.
You won’t get the largest cash flow a month – think $100-$150 – but you are getting property appreciation, your mortgage paid down, massive tax write offs, and a modest $1200-$1800 cash a year. The other nice thing is you can stack your investments in the same building; so if one condo is working, you can continue to reinvest into more condos and duplicate your already successful efforts. I have one client up to 10 units in one building and barely lifting a finger.
And finally I’ll provide you with the “money where my mouth is” statement: my associate Brian Peltier owns and rents out two condos, my assistant Jane owns 2, her sons own 3 more, and I own one. (Full disclosure: I live in mine, but after seeing how happy our condo investors are, and how little time it takes, I’ll be holding onto my condo for a long while).
Send me an email back or call me if you want to get started. We can send you out the best properties available and let’s get you moving on these opportunities before these pesky interest rates climb higher (another 0.25% yesterday) and property appreciation escalates (Windsor’s up 3.3% on property value so far this year, sales are up 14% — this is all great but it does mean get moving now, so you are on the good side of the appreciation).
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