We all look forward to having some safety net to fall back on in critical times with growing age. For enjoying such a pleasure of worrying less in old age, you need to plan your finances carefully from an early age.
Recently we are seeing many people are into the idea of Financial Independence, Retire Early (FIRE).
The trick is to make smart investments while still young to strengthen your income sources for the future.
Though investing in real estate can be a good option, the return can also be attractive, but it requires a lot of planning, research, and hard work. Let’s see some of the factors you need to consider before deciding about investing in a piece of land or a house property in the Greater Montreal area.
Check your savings
Buying a piece of land or a house can be costly. Moreover, if you are purchasing a home to rent it out, you will also have to bear the maintenance cost.
Experts say that people should not take a huge loan to invest in real estate. So, it is better if you have sufficient funds in your savings to purchase with a little down payment.
Even if you are taking a mortgage loan for buying a house, make sure that you have, at least, the funds to make mortgage payments even if you do not have any income in the form of house rents during the early phase.
Be ready to incur some expenses
The purchase of a new house can come with a lot of added expenses. Repairing it, maintaining it, paying taxes, buying insurance for the home, and building it into a house, which is well-equipped with all modern utilities, all these can put a hole in your pocket.
Even after you find tenants, it’s better to keep aside the first few months’ rents and create a fund out of it to sustain any future expense on the house.
So, be ready because your financial pressure will not end only at buying the house. It is just the beginning. A series of various other expenses will follow in the future.
Be sure about the neighbourhood
If your house’s location has a bad reputation for security or if the place is too far away from the city, not having good essential services like departmental stores, hospitals, etc. then finding tenants can be a difficult task. So, do proper research about the neighbourhood before you buy a property.
If you are buying a piece of land, evaluate its future value before making a final decision. Like, if it’s in the outskirts, then find out if there is any chance of a town developing nearby so that you will have an idea about your future returns from the investment.
Be prepared to accept the income gap
It is unrealistic to believe that you will always have tenants. There can be times when there will be no tenants, so no income. You should be mentally ready to accept that gap in your income flow.
And if this rent is one of the primary sources of your livelihood, then you should make plans beforehand to withstand this uncertainty.
In conclusion, we can state that investing in real estate is not always rainbows and sunshine. It comes with a lot of uncertainty, and it demands the ability to bear added expenses.
Maybe you can start by renting out a floor of your duplex apartment. Thus, gain experience, and then you can try your hands at the best properties in the Greater Montreal area. Also, you can hire a good property management company in the Greater Montreal area to help you with real estate investments.
And if you think that you are prepared can take up all these responsibilities of investing in real estate, then only go for it.
MTL GROUP is a property management and financing company, operating in the Greater Montreal area in Quebec. Our professionals are just a phone call away to assist you with your property management and financing needs.