Investment Property in Mississauga

How To Identify A Good Investment Property

Buying an investment property is easy, if you know HOW to look. 
The idea of owning a real estate empire is an alluring one. Buying an investment property can be a scary thing, but it doesn’t have to be.
While there are a lot of moving parts, there is also a system. And once you figure out that system, it is very easily repeatable. 
When you blindly follow the “get rich quick” schemes, you don’t have a system. THAT’S where the horror stories come from that we all fear so much. 
Over the last few years everyone that even looked at real estate seemed like a Superstar. As the saying goes, “a rising tide lifts all boats”. With record price increases over the last few years it seemed like even shipwrecks were lifted too.
But, as Warren Buffet says “You don’t find out who’s been swimming naked until the tide goes out.” And we’re seeing a lot of naked people these days. People who “invested” without a system. 
So, your inside voice is probably screaming “what’s the system???”
It’s actually quite simple. Buy quality, cash flowing properties in growing areas. 
So, let’s break that down. 
#1. Buy quality properties. 
If you have to try to convince yourself how a property could work, then it’s likely NOT the right property for you. If the property needs extensive renos or has major water or structural issues, the cost to make it right (because you will make it right, right??) could destroy any cash flow you may have seen. Let’s save the “ugly duckling” for the 25-minute TV shows. 
#2. Cash flowing properties. 
This means the property brings in more rent than all the expenses combined. Covering the mortgage payments, property taxes and insurance, is a great start. But you also need to consider condo fees (if applicable) and property management fees (you might not want this job). Don’t forget a 10% vacancy allowance as you won’t always get back-to-back tenants. If you’re buying a property and it costs you money to own it, it’s not an investment, it’s a liability.
To help you figure out your mortgage payments you can use this mortgage calculator for you to estimate your payments. 
#3. Growing areas and Gentrification. 
This means areas that are increasing both economically and in population. Look around the neighbourhood, what do you see? Is there an influx of turnover? Are home owners doing renovations? Is there a lot of new home construction or office buildings? Are there plans for easy transportation?
Helpful hint…if there’s a Starbucks going in, you know it’s going to be a great neighbourhood 😉
So how do you know you’ve found the right investment property? A smart investor is picky and patient and will wait for the right property. The key is to not fall in love with the dream of owning real estate and ignore the fundamentals to make it happen. 
Stick to the system and focus on fundamentals. 
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