Investment properties are an excellent way to grow your equity, but it’s not for everyone. If you’re looking for a way to increase your personal wealth, purchasing an investment property may be right for you – especially in today’s real estate market.
Great investment properties can be found throughout East Vancouver. I have a deep knowledge of the communities of East Vancouver and have helped investors just like you find those ideal investment properties.
What's happened? Today's availability of fairly priced (and even some undervalued) investment properties, combined with outstanding low interest rates and a solid rental market have boosted sales. This combination gives you the opportunity to increase your net worth.
Keep in mind any opportunity has a down-side risk. Real estate is complex and each property is different. Experience shows rental property investors can benefit from informed real estate professionals who can find the right location with the right financing. The key to success today is doing your homework and making sure the numbers work.
If you’ve bought your own home, you already know many of the advantages of real estate ownership. Here’s a brief overview of the many ways you can profit from owning rental real estate.
As an investor, you magnify the return on your investment by borrowing a large part of the purchase price. That is, by limiting the amount of cash you invest, you make your cash go a long way.
Leverage means using borrowed money to increase equity. And equity – the difference between what the property is worth and the balance owed on the mortgage – is what’s important when figuring whether your dollars are invested wisely.
Assume you bought a $100,000 rental property with a 30% down payment, and after several years the home is worth $135,000. The $35,000 return on your $30,000 investment is more than 100% (several factors will actually lower your profit, but to illustrate the principle of leverage we’re keeping the numbers simple). If you bought that same $100,000 property with all cash, the return on your investment would be 35%. Leverage puts other people’s money to work for you.
Benefit from Growing Equity
Even at a modest rate of appreciation, real estate may well yield a higher return on the cash investment than would some other financial investments, such as bonds or long-term CD’s. Each mortgage principle payment you make is a payment to yourself. You build equity as your mortgage principle shrinks, even if your investment property doesn’t change in value.
Although homes in different parts of town may appreciate at entirely different rates, the key is shopping carefully for a purchase guided by a knowledgeable professional. Review your expectations and think about how long you plan to hold onto your investment. When you reach your predetermined “equity target”, it's time to sell or refinance – and perhaps use the cash you receive for other investment properties.
I Found a Great Investment Property!
Scott was reliable, polite, punctual and followed through with finding me a great investment property! I would recommend him with high praise, he has honor and integrity also!
The Investors’ Real Estate Agent!
Scott Warren is the Investors’ Real Estate Agent. As a California resident, I could not have considered investing in Canadian real estate without the extra help and service of a top local agent whose integrity I could rely on. I required personal attention tailored around my visits to B.C., full management of real estate purchased and even coordination of cosmetic renovations. Scott provided this and did so graciously, promptly, and with professionalism beyond comparison. I recommend him without reservation.
Neil D. Gitnick