If you don’t own a home yet, you can prepare to do so. Start at the beginning by establishing a savings program. Talk to your financial guy or gal about strategies and plans on how to get started. You could learn how to super charge your RRSP’s and loan yourself the down payment or use another strategy such as “Pay yourself first.” Be patient and work at saving. It can take time to save but it will be worth it in the end.
Once you are a home owner and you are ready to invest further in the world of real estate here are a few other rules to keep in mind when looking to put together deals.
Cardinal Rules for Investing
Cash flow – Aside from your principal residence, you want properties that can cash flow. This means the property can cover its own expenses and put money in your pocket. This is important because even if the price of real estate goes down you and your property can ride out the storm and still cover the expenses. In the stock market when it goes down, you have to wait for it to rebound to profit, or sell at a loss. Cash flow will continue to pay you money even if the property value drops.
Always put it in writing. Any contract, joint venture agreements, partnership agreements or loan agreements that are made should be in writing because if it is not in writing it does not exist, ESPECIALLY with friends and family.
Have a Plan “B” in case things do not work out as planned and an exit strategy.