Most people know that much of the world’s wealth has been created through real estate investment and many of us want to jump on that band wagon but are paralyzed with a fear of jumping in. What is the solution?
It’s healthy and smart to be skeptical of every good deal you hear about. Today’s good deal could turn into tomorrow’s nightmare if you don’t carefully weigh the pros and cons. There is however a difference between healthy skepticism and plain paralysis. The way to sort out the two is by being educated and realistically weighing the risks.
First, being educated means knowing everything you can about the real estate value; is the property in a decent area where you are likely to have tenant demand? Is the structure in good condition? Is there a rental history? Is the property zoned to permit a multi-family dwelling? In regard to risk, ask questions: Is it in in a rentable area? What are going rents in the area? What do the financial statements look like? Most importantly, what is the return on investment?
My favourite question is, what is the worst that can happen? Chances are you’ll find the worst case scenario is not as bad as you thought.
Multi-unit investment properties are not plentiful in the South Georgian Bay area and often, ones that have been for sale in the past have issues such as poor histories, poor management, low rents versus asking price and so on. It’s hard to come up with something where all of the pieces fall together to spell great opportunity and low risk.
I’ve just listed a FOUR-PLEX in Meaford which ticks all the boxes:
- Four units that help to even out income streams
- Successfully operated as a four-plex for over 40 years!
- The biggest testimonial is that it has been in the same family for over 40 years
- Was superbly built in its day as it was the original Meaford “cottage” hospital
- Fire inspection completed and passed
- Stable tenancies, all on leases, all wishing to stay, all with last month’s rent on deposit
- Ample parking
- High rental demand area
- Great condition with updated roof
- Over time, it will need new windows but can be done slowly as a capital project writing off expenses
- If or when units become unoccupied, they could be modernized to increase rents
- Net income of over $30,000 with an asking price of $399,000 giving a present return of over 7% with minimal risk!
- If you lived in one unit and rented the rest, you could live here for free.
Oh yes, and here is how you can live for free. If you occupy one of the units yourself, the rents from the rest of the units can cover all of your operating expenses. How amazing is that?
This is an opportunity that should help you get over your paralysis and begin on the journey of real estate investing in one of the nicest areas of Ontario. Call me to get started!