Top 10 Real Estate Investment Tips for Beginners Who Want to Succeed
You have decided to get into real estate investing. This is very exciting. Where do you even begin? I have been in your shoes before. I know how it feels to be overwhelmed. That is why I want to share my tips for succeeding in real estate investment. These are the things I wish someone had told me when I started. Today you and I will go through ten tips that will save you money, time and headaches. By the end of this you will have a plan to start building your real estate portfolio with confidence. 1. Start Small and Think Long Term Let me start with the basics. An eviction notice to tenant is a written document. It informs a renter that they must move out by a date. It is not a court order. It is the first legal step in ending a tenancy. In most of Canada, including Alberta and BC you cannot simply tell a tenant to leave. You cannot change the locks. Throw their belongings out. You must use the eviction letter to tenant that follows provincial laws. I have seen landlords lose thousands in fines. They skipped this step. Used the wrong form. The eviction notice is your shield. Use it properly. The law protects you. Use it wrong. You could end up paying damages to the tenant. 2. Learn Your Local Market Inside and Out You cannot invest in a city you do not know. Spend time driving around neighborhoods. Notice which areas have shops and restaurants opening. Look for streets with homes. Talk to real estate agents and property managers. Understand what people are looking for in a property. A good tip for real estate investment is to focus on one or two neighborhoods and become an expert in those areas. I know the northwest Calgary market well. I know which streets are prone to flooding, which schoolsre good and which landlords are having trouble finding tenants. That knowledge gives me an advantage. 3. Run the Numbers Honestly Do not fall in love with a property before you do the math. Calculate the cost of the property the cost of closing the deal the cost of fixing it up and the cost of holding onto it. Then estimate how rent you can charge and all the expenses that come with it including taxes, insurance, maintenance and vacancies. Use a rule to quickly figure out if it is a good deal. After all that what is your monthly profit? If it is negative walk away. If it is positive look closer. I have walked away from properties that looked great but did not make sense. Real estate investment is about numbers, not feelings. The prettiest house is not always the investment. 4. Get Pre Approved Before You Start Looking Nothing is worse than finding your dream property. Then discovering you cannot get a loan. Talk to a mortgage broker on. Get pre approved for an amount. Understand what interest rate you qualify for. Know your options for the payment. In Canada you can buy a property with little as 5 percent down if you have insurance.. That means you will have higher monthly payments and insurance premiums. I recommend having least 20 percent down to avoid insurance and lower your monthly costs. Getting pre approved also shows sellers you’re serious. It gives you power to negotiate. 5. Build a Reliable Team You cannot do this alone. You need a real estate agent who knows about investment properties. You need a home inspector who will find every issue. You need a lawyer who specializes in real estate deals. You need an accountant who knows the tax rules for properties.. You need a property management company if you do not want to handle tenant issues yourself. I learned the way that going for the cheapest option can cost more in the long run. Build relationships with professionals who’re honest and reliable. Paying a little more for quality work can save you thousands of dollars. 6. Never Skip the Home Inspection I have seen many errors. Mistake one: using the form. Each province has eviction letter to tenant templates. Using an internet form can void the entire eviction. Mistake two: filling out the form incorrectly. Wrong dates, names, wrong address. Mistake three: serving the notice improperly. Mistake four: accepting rent after serving an eviction notice to tenant. In provinces accepting any rent resets the clock. You lose your grounds for eviction. Mistake five: trying to evict for a reason like the tenant complained about repairs. That is illegal. Mistake six: doing a self-help eviction. Changing locks shutting off utilities or removing doors is an offense in most provinces. Avoid these mistakes. Your eviction will go smoothly. 7. Factor in All Costs Not the Mortgage Many new investors only think about the mortgage payment when they calculate their monthly costs. That is wrong. You also have to think about property taxes, insurance, utilities, maintenance, repairs, property management and vacancies. A simple rule says that half of your rent will go to expenses. On a 2,000 dollar rent expect 1,000 dollars in expenses. That leaves 1,000 dollars for your mortgage and profit. If your mortgage is 1,200 dollars you are losing money every month. I have seen investors buy properties that lose money because they ignored these costs. Do not let that happen to you. 8. Screen Tenants A bad tenant will cost you thousands of dollars in unpaid rent, legal fees and property damage. Do not rush the screening process. Check their credit. Verify their employment and income. Call their landlords. Check their references. I also do a phone interview to see how they communicate. If they are rude or evasive I pass. A tenant with a credit score and stable employment is worth waiting for. A property management company can handle screening for you. That fee is worth every dollar. 9. Plan for Vacancies and Repairs Even the best properties will sit empty sometimes. 10








