Expert advice, market reports, and tips from the Niagara Region real estate professionals.
As landlords we are in the business of attracting and retaining tenants, not getting rid of them. But there are times and circumstances where it becomes necessary to part ways with a tenant. At such times there are specific procedures and time frames that need to be followed.
The point of the Money Machine seminars and the principle behind it, is to build wealth, both by way of asset value, or net worth and also by way of a passive income stream that will carry you comfortably into retirement.
Buy one Property a Year for Ten Years. Never Amortize for more than Fifteen Years. Never Sell. Three simple rules. Not necessarily easy. But simple. And yet, time and time again people who attend my seminars or read my material get started on that path, but then they fall off the rails. And generally what they have problems with is rule number 3 – Never Sell. What happens is this.
People acquire real estate for a number of different reasons. The end user, for example, which in the case of residential real estate would usually be the home owner, buys a property as a place to live. Whether it be a first time buyer, someone transferring in or out of the area, a move up buyer wishing to accommodate a growing family, or an empty nester looking for a home more suited to his current lifestyle.
When a real estate salesperson is licensed to trade in real estate, he is licensed under the Provincial Real Estate and Business Brokers Act. He is licensed to sell real estate, bricks and mortar, and he is licensed to sell businesses. Often they are combined where a buyer is buying both an operating business and the building from which it operates. And while that is the optimal situation it is not always the case. The real estate and the business within it are two separate things, and need to be treated as such.
Forgive me, but today I am going to rant! I think you all know I believe in real estate investment. That hasn’t changed. And the basic premise of the Money Machine seminar is developing an investment portfolio, largely composed of residential rented property that will provide you with a steady stream of passive income into retirement. That hasn’t changed. But I believe I have a responsibility to tell both sides of the story. The good as well as the bad. And while being a residential landlord has always had its challenges, in some ways it’s getting tougher still.
Generally in our Money Machine seminars and related articles we concentrate on residential rentals. The reason is that for the novice investor it’s both easier to understand and easier to get into the residential investment market than it is commercial. Having said that, however, Commercial is a very valuable avenue for real estate investment and needs to be considered.
Whenever you purchase a property, you are essentially buying the land and improvements. That includes any trees or landscaping. It includes, of course, the bricks and mortar. But it also includes an intangible element. Something we call the “bundle of rights”. The right to occupy. The right to quiet enjoyment. And subject to the laws of the land, zoning etc, the right to remodel, to expand the footprint or demolish it for that matter.
Some time ago, the Government identified two distinct problems within the housing sector in Ontario which they set about to rectify. The first was availability. In many municipalities in the province, especially around the Golden Horseshoe rental units were extremely hard to come by. Vacancy rates were at or below 2%. Good for landlords. Not so good for tenants.
