You Must Act

When the inspiration (the psychological processes of thinking, feeling and willing) to work is there, then actual activity takes place with the help of the senses.

Many times, you might have read a good real estate investment article and got motivated to take action, but may have often shied away or got too busy with your lives and failed to act upon it. In my opinion, there is no need to feel bad, if there is something destined to happen, it will, no matter what. But for something to take place, you MUST take action.

Depending on what stage of life you are in, your goals can be different. Real estate is always a part of one’s adult life; of course, real estate goals may be different, for different people.

But life is more than just real estate, that's another topic for another time.

You are a Young Adult or Newcomer to Canada

If you are a young working adult, with a negligible debt and a good credit, you might be better of not renting. All you need is a five percent down payment to come a step closer to home ownership. Have you ever considered, how much you are contributing in making your landlord richer? What if you can afford to spend a little more than your monthly rent and opt for buying a property instead? You may well be able to pay towards your own mortgage.

You may want to read my blog post first time buyer or investor questions, and come attend my home buyer session.

You are a Parent of a Young Adult

Most people in this situation might be living in their own properties. Most of you are in the middle age group. Most of you have worked hard in your life and you are at a stage when you want to see your children get a head start in life. So here are some options that come to my mind:

You can either help your adult child buy his/her first home, or you may even consider buying a starter condo, and have one of your adult child or a child of your friend or relative rent it. In my opinion, one's own kin is the best tenant one can have.

You are planning to Invest

If you are planning to invest in real estate, the first and foremost thing to remember is that there is no gain, without pain.

Profit and loss, happiness and sorrow, night and day are inseparable parts of life. So, when you are expecting higher than average returns, you must also be ready to deal with tenants (good or bad), fixing properties, book keeping etc.

Sure, there is always help available and you can run your real estate investment, without worrying about day to day affairs. Professionals can be hired (real estate brokers like myself, property managers, accountants, landlord tenant paralegal companies) to buy the right type of real estate investment, property management, handling landlord tenant issues, property improvement, book keeping etc.

Who knows, one day your real estate investments might even help cover some or most of your retirement expenses!

You are a moving up or down

You can be a home or condo owner who is planning on buying a bigger sized property or someone who is considering moving into a smaller property. Both the above situations depend on what stage of life you are in. Depending upon your financial situation, you may even think of keeping both the properties, i.e., you may consider keeping one of the properties as a real estate investment.

You are retiring and want to leave your legacy behind

Your financial planner will be the right person to advise you on more ways you can use your fully paid property. Again, depending upon your needs and desires, choices can be many. For all of the above financial options, it would be prudent to consult with your financial advisor, accountant or lawyer. As far as real estate investment opportunities go, you can come and see me.

Come to me if Your New Year’s resolution revolves around Mississauga Real Estate

If you are a first time buyer, a move up or a move down buyer/seller, a seasoned investor or just someone who wants help to make a sound real estate decision, contact me, to buy or sell real estate in Mississauga.

Just last month Forbes magazine named Canada as The Best Place in the world to do business. I am not surprised, our resource rich Canada is world's No.1 and why not, Canada has a lot to offer. Not only does Canada attract the best people from all over of the world, big Canadian cities including their surrounding suburbs are highly multicultural, where different cultures thrive and proudly adapt to Canadian values.

Foreign individual investors from Europe, Middle East and Africa, as well as the growing middle class in India and China are investing in Canada. In my real estate business, I have witnessed an increase in my overseas client portfolio in 2011.

These investors find a safe haven in our Canadian currency. Many people are sending their children to Canadian Universities and colleges. Not only do foreign students get topnotch education, on completion of their studies our Canadian government helps them secure work permit to gain work experience in Canada.

What I can offer to an International Investor

• Help you buy easily rentable properties in good neighbourhoods (one can book pre-construction or buy resale)
• Assist you in opening non-resident bank account and secure mortgage approval (foreigners can buy with only 35% down payment)
• Put you in touch with lawyers (real estate, business and immigration)
• Put you in touch with property management companies to take care of your investment
• Put you in touch with tax advisors and accountants who will file your rental income tax

You will be required to come here for 1-2 weeks to select your property and complete the above formalities.

I do not and cannot provide any legal, accounting or tax advice, but can refer you to some professionals.

A short holiday-cum-business trip may well be on the cards for you to get a glimpse of our beautiful Canada, as well as to explore investment opportunities!

Related Topics

Downtown Mississauga Investment
Investing in Condo
Non-Resident Investor FAQ

Its simple math & logic – but nothing without a little risk!

This is a story of five old pals, Kumar, Roger, Cindy, Harry and Jessica. In 2008, each decided to invest $100,000 somewhere. They all already owned homes worth around $400,000 and incidentally, everyone had about $100,000 left on their mortgage. Like anyone else, they all had their own wants and needs, and a strategy they thought was best in their given situation.

Kumar, lured by the charm of a larger home for his family, decided to move to a bigger house. He used his $100,000 savings, bought a house for $500,000 and continued to live there happily. After three years, Kumar’s home is worth around $600,000 or 20% gain over last three years. Kumar’s gain = $100,000. 

Roger, being conservative by nature, decided to pay off his balance mortgage loan. He was happy, and why not, he is one of the lucky Canadians who celebrate a mortgage burning party early in life. After all, he now lives in a debt free home. His house increased in value over these three years. What else could he ask for? After three years, the value of Roger's property has gone up to $500,000. That is a whopping 25% overall appreciation. Roger’s gain = $100,000.

Cindy on the other hand, invested her $100,000 in two condos rather than paying off her mortgage loan. She put $50,000 in each property and bought two condos worth $200,000 each. She is a keen real estate investor, and prefers to make her money work harder for her in terms of returns. The two condos, once rented, practically paid for themselves. On a side note, she may even choose to hand her keys over to her adult children, giving them a head start their life. In these three years, all her properties grew up in value. Her original residence is worth $500,000 now. With an overall gain of 20%, both her condos are worth $240,000 each, as of today. Cindy’s gain = $180,000.

Harry decided to invest his $100,000 in stocks and mutual funds. We all know that since 2008 the stock market has had its ups and downs. After losing almost half of the value of his well diversified portfolio, Harry is yet to recover in full. Should Harry decide to cash in today, Harry would end up losing almost $10,000 out of his total investment of $100,000. Harry’s gain = negative $10,000.

All of the above gains or losses are only on paper, before other expenses, and not actual returns on investment. Profit and loss incurs when investments are cashed in. Both stock and real estate incur buying and selling costs, broker’s commission, management fees, capital gain taxes etc. Rental properties involve maintenance expenses, repairs, property taxes etc.

During these three years, principal portion build up has also helped to increase equity in all of the above properties. Even better, in case of rental properties, tenants helped in paying off landlord’s properties (as in the case of Cindy).

Jessica did not have any savings of her own, but she had over $200,000 room in her secured line of credit. On her financial advisor’s advice, Jessica borrowed to invest $100,000 from her secured line of credit into two pre-construction builder condominiums worth $200,000 each. Though delivery of these two condominiums is yet to happen, Jessica knows that the market value of these condos in today’s market is no less than $240,000 each. Jessica plans to put 25% down payment in each of these properties and does not want to incur negative cash flow after renting them. By the way, her final installment before closing ($40,000) is due on occupancy. So in a way, to date, Jessica has only borrowed $60,000 from her line of credit. Jessica has some three options and she has not yet decided. Jessica might sell both her condos and cash in her profits, sell one and rent the other or rent both her condos.

POLL QUESTION: What is YOUR investment personality?

Moral of the Story

Moral of the story, women are smarter than men! Just kidding – it is important and pays to be open-minded towards at least evaluating different options available to you if you have some extra cash to invest. Everyone has a different perspective on life, and everyone is right in making their own decision. I do personally believe in the potential of real estate in making you rich! And, I practice what I preach!

Finally, remember, before you venture out into investments, it is prudent to speak to professionals (lawyer, financial advisor, tax accountant, Realtor etc.) first.

Contact me if you’d like to learn more about real estate investment opportunities and to discuss options that might be right for you.