One of my favourite things about real estate investing is that it provides you with options. I don’t know about you, but I like having options in life. Options on what I want to wear in the morning, options about where to go on holidays, options about what I want to watch on Netflix, and options about my finances!
It may not seem like it at first when you bootstrap the purchase of a new rental property that can barely cash flow, but give it a good 5 years, and even better 10 years, and you’ll see what I mean.
Once the property becomes stabilized, meaning that the deferred maintenance has been taken care of, and you have happy tenants living in your property, the cash flow will come. You pay down some of that mortgage, the price appreciates, and bingo, you’re 5 years into it and your mortgage is up for renewal.
Now is when you have some options. You can of course simply renew your mortgage, you can look to sell the property and take back a bunch of equity, or you can refinance the property and have the best of both worlds.
Real estate investing is like a forced savings plan. Tenants pay down your mortgage for you, if you’re investing in the right markets you will generally see an uptick in price appreciation over a prolonged period of time. This forced savings plan will provide you with many options. Multiply this over a number of doors, and even more options will open up to you.
To summarize, I like having options in my life, and real estate is a great way to provide options for yourself and your family. Although real estate investing can be difficult at times, the equity that you build will help you through these tough times. Health issues, loss of job, divorce situations, business problems, etc. are all part of “normal” life, and building up a real estate investment portfolio will give you options to deal with these difficult situations.
Looking for some real estate investment advice in the Vancouver or Edmonton markets? Reach out to our real estate and property management company here!
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