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Things to Consider Before Buying an Investment Property

Updated: Nov 14, 2023

If you turn on HGTV or read any financial book you'll most likely get the advice to invest in real estate. Although Harder Real Estate team members do personally own some investment properties, they know that it's not for everyone. We've outlined a few things to consider before becoming a real estate investor:

1. Is this a long term plan?

Real estate investing is not a get-rich-quick-scheme rather it's a long term financial plan. If you will need access to that money soon then it might be better to invest elsewhere.

2. Who will manage the property?

Unless you are willing to part with a portion of your profit to hire a property management company you will be the one on-call and needing to deal with repairs, questions, and finding tenants. Depending on the number of properties this can be quite time consuming, you need to evaluate if you have the time to take that on.

3. Can you afford repairs and/or vacancy?

Although the idea is to always have tenants and capital flowing, life happens and things can change in an instant. What helps ease this stress is having extra savings dedicated to the property for unexpected repairs, mortgage payments, and so on.

4. Can you cover your current expenses?

If you find that money is already tight than adding an investment property can create additional stress and financial burden. Ideally you want to add an investment property when you are not living paycheque to paycheque and won't be relying on the property's income to live on.

5. How are the local rental and job markets?

Even if you have the money and time to buy it's important to look at the market and see if there is a market for the property. Some communities might be too small to support a rental market, others might be a transient community in an economic downturn. Doing the research beforehand can save or make you a lot of money.

If you are an investor let us know if we missed anything on our list of things to consider before buying an investment property. Whether it's in Grande Prairie or elsewhere we'd love to help with your real estate needs including building an investment portfolio. Contact our team today!

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