Are you looking to gain financial freedom by breaking the 9 to 5 corporate mold? Now more than ever, people are branching away from the standard and focusing on an independent mindset. Through the art of investing, you can increase your wealth without the tiresome workweek. So, if real estate investing is so beneficial, why isn’t everyone doing it? As you may know, real estate can be a daunting investment to undertake as a newcomer.
However, it’s a worthwhile topic to understand and once you do, you’ll be kicking yourself for not starting sooner. If you’re ready to learn how to invest in real estate, this comprehensive guide is your first step to gaining financial freedom.
Why Should You Invest in Real Estate?
Currently, the Canadian real estate market is booming. With low-interest rates and limited availability, residential and commercial properties are appreciating at a rapid rate. A process that usually develops over years is happening on a month-to-month basis. If you’re looking for the best time to invest, the time is now. Even with the Covid-19 pandemic changing the landscape of our “new normal,” you can invest in a property that has low mortgage rates and increasing value.
How to Invest in Real Estate in Vancouver?
While now is the time to invest, it’s a fiscal opportunity that requires research, knowledge, and a realistic mindset. Before you jump into investing, consider your short and long-term goals, your financial situation, and the current market. With these tips, you’ll be on your way to success:
1. Assess Your Savings
Jumping into real estate investing in Vancouver can pay off big time; however, it’s important you have a clear understanding of your own finances beforehand. First things first, you’ll want to save as much money as you can. Try taking 10% of every pay-check and put it into a savings account. Having a cushion to fall back on gives you greater financial stability. It also allows you a larger jumping-off point. The more you can invest initially, the larger your payoff will be down the road.
2. Check Your Credit Score
In addition to savings, you’ll want a decent credit score before diving into real estate. Banks and moneylenders will want proof of a stable income and your ability to pay off bills in a timely manner. Pay your bills in full and on time, while regularly checking your credit score. Building a healthy routine will go a long way to managing your real estate investment and preparing you for new financial undertakings.
3. Determine Your Target Audience
As a landlord, who are you hoping to rent to? For example, if your key demographic is a working professional, consider their lifestyle. Perhaps they’re fresh out of university and haven’t started a family. Rather than buying a single-family home, you’ll want to look at condominiums and apartments. Location-wise, proximity to the city is key. If you’re investing outside the city, consider places situated near transit lines. Increase your draw by minimizing the commute. By assessing the values, finances, and lifestyle of your target demographic, you can tailor your investment. AirB’B or VRBO are also a good way to rent out your property, this route however is more costly to run, but the monthly income can be significantly higher.
4. Evaluate the Costs
What does the size of your down payment look like? Ideally, the more money you can put down initially, the better. A down payment of 20% is what you require if you own another property. Additionally, be prepared to pay 2-4% of the property price in closing costs. Keep in mind, these are estimates. You can try out this BC Mortgage Calculator to determine your monthly payments. Better yet, advise a trusted real estate agent to gain a custom evaluation of your total costs.
5. Speak With a Well-Advised Investor
Real estate investing can be overwhelming; however, other investors can provide an abundance of knowledge. Seek advice and practical tips to learn the realities of being a new real estate investor. For example, if you’re interested in Surrey real estate, a knowledgeable realtor in the area could be a priceless asset. Avoid jumping in blindly; chat with someone who knows the market to get ahead of the plights first-time investors experience.
Property in Vancouver and surrounding areas can be a big undertaking. While the payoff is worthwhile, there are hurdles you may face on your way to financial success. An accredited real estate agent and a mortgage professional can help you navigate potential trials and errors. A real estate agent can ensure that your property has lasting value. At Kim Philips Real Estate, we’ve helped many first-time buyers invest in real estate with great success. With experience, passion, and a desire to see you succeed, we can help you gain financial freedom through real estate investments. Contact us today to have your real estate journey made easy.