Should I Purchase A Single-Family Home?

Should I Purchase A Single-Family Home?

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When I talk to my younger clients, one question comes up over and over: should I buy a single-family home or a condo? 

 The path to Real Estate success involves turning some conventional wisdom on its head. One area that can require reassessment is home-ownership, especially for younger investors who may not have as much capital to play with.

So, is homeownership a sound investment?

The Question

To evaluate homeownership as an investment, we need to view it through the lens of capital deployment. We also need a unit of comparison. 

First, if we’re comparing purchasing a home (read: appreciating object) to spending money on consumer goods (or depreciating objects), it makes total sense to become a homeowner. So yes, homes—because they are appreciating assets—gain value over time. 

But, if we’re evaluating an owner-occupied single-family home as an investment vehicle, we’ll face a different financial analysis. We’ll need to compare a home to other types of passive income generators like a rental property.

  1. Capital

As investors, we spend money or tie up capital to make a profit. That’s what a hard-earned bank balance is for. Deploy capital to generate the best returns. That’s the first law of investing. It’s actually the definition of the word “investing”.  

If your capital is the golden egg that will get you out of the rat race, are you sure it will mature properly if you place it to a condo or a residential property? The question shouldn’t be “Am I losing money on my single-family home?” It should be “How can I apply my hard-earned savings and capital to generate the most return?” 

To answer this question, you must calculate the rate of return on the cash you plug into a rental property, and compare it to what you save on rent plus appreciation on a single-family asset. This will give you two rates of return that you can evaluate side-by-side. 

Most people—when they think about owning a home—frame the mathematics of homeownership in terms of saving rent money. But they tend to forget about the golden rule of capital deployment. The golden rule is: spend money to make money or let your capital chase the highest returns. 

You mustn’t automatically assume that using your capital to save rent money is the best investment opportunity available to you. Seed capital must make a profit. If you take one expense—rent—off your balance sheet, will it truly open the door to financial freedom? 

You can find a sample calculation—of renting versus owning as an investment opportunity—in the Business Case section of my book.

2. Expenses

When calculating money “saved” on rent, don’t forget to factor in all the expenses that come with homeownership. Of course, there’s the mortgage. Payments are part principal (capital payments that decrease the overall loan amount), but initially, a lot of the payment is bank interest. 

Interest isn’t the only expense: homeownership comes with property taxes, the chimney sweeper, the insurance, the plumber, the exterminator, etc. Many homeowners like to do remodels and renovations. Because these upgrades generate no income, they are—in a sense—also expenses. 

Likely you will find homeownership, once you factor in covering all expenses, costs way more than paying rent.

To see P&L statements of renting versus owning as an investment opportunity check out the Business Case section of my book.

3. Tax Implications

There are tax implications to homeownership. When you own rental property, you can deduct mortgage interest as a business expense. All the renovations and maintenance are tax-deductible. Travel expenses, administration and home-office fees, part of your cellphone bill and accounting expenses—all tax-deductible. 

Wealthy people sometimes own rental property for tax planning! 

The same doesn’t hold for owner-occupied properties. Expenses associated with primary and secondary residences are not eligible for tax deductions. 

There is a capital gains exemption when you sell your single-family home (you do not have to pay tax on the appreciation of your property if you occupied it). The rental property comes with a tax liability that comes into existence at the time of sale: the capital gains tax. But this is akin to owning RRSPs (Registered Retirement Savings Plans). You accumulate wealth by investing for years and then when you cash in your investments, you pay tax. 

In Canada, capital gains tax is calculated on fifty percent of the appreciation. This boils down to a 25% flat tax on the appreciation of your rental properties. Depending on your tax bracket, it might be more advantageous to pay capital gains than to pay income tax! 

4. A Lifestyle Choice

Overall, home-ownership should be viewed as a lifestyle choice, not an investment. When you do the math, you’ll likely find better uses of capital than to park your nest egg in a single-family home. 

Should you buy a home then? The answer is, it depends on where you are in your investment journey. Once you have passive income streams and income-generating assets, why not splurge on lifestyle if you have extra capital lying around.

Mindful landlord’s advice: go through the exercise of evaluating return-on-investment before making a decision to purchase a home. You might be surprised! And at least you’ll be making an informed decision. 

Learn More

For a full detailed financial model that will help you compare the two scenarios—renting and owning as an investment opportunity—see the Case Study in my book.

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Do’s and Don’t of Selecting an Agent

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Template for Selecting Your Agent

In summary, a broker—the right broker—can add value. You need to be careful about how to choose one. The main qualifications should be unscrupulous ethics and familiarity with investment properties. Here’s how to run interviews to find the perfect broker for your investment deals. 

Do

  • Have them do a building cash flow statement (or two). Even if you have your own cruncher, this will give you insight into their level of competence when it comes to investment buildings. 
  • Speak to previous clients, especially investors. Getting a referral from someone who’s purchased a single-family home won’t tell you whether a realtor is any good with rental properties. 
  • Check if the realtor has owned rental property. If you can shop with someone who has the eyes of a landlord, awesome! 
  • Ask about other deals they’ve done on the type of property you’re looking for. For example, if you want to purchase a multiplex property and you’re working with an agent who deals mostly in condos, you might not have the right person for the job. A realtor’s willingness to discuss other recent deals will give you a sense of how active they are in your niche market.
  • Interview more than one agent before you award business. 

Don’t

  • Work with someone who has no investment property experience even if they’re your cousin or your father’s best friend or your sister-in-law. They might be ethically beyond reproach and very astute at making deals, but they won’t be able to help you if they don’t understand the market. Sorry!
  • Work with someone who’s unfamiliar with the area you want to buy in. Tenants, construction techniques, building age, and so on vary a lot by the district. If you work with an agent who’s used to doing business only in suburbs where buildings are recent, lot lines are clear and straight, and by-laws are simple, they’ll be out of their depth pretty quickly in older neighbourhoods where these lines are blurry and the buildings are older.
  • Sign an exclusivity contract with a broker, but do be fair to them. Keep in mind that realtors get paid only when they make a sale. If your agent is doing their job right, they’ll put a lot of work in for you. Be mindful of this. Don’t act in a way that will cause them to lose out on payment for the job they’ve done. 
  • Feel that you need to sign a binding contract that requires you to purchase only through them. You want to be able to jump ship without being penalized if at some point in the search process you become dissatisfied with their service. Just make sure to be transparent. Don’t work with more than one agent at a time. You’ll burn relationships that way.
  • Be pressured, coerced or guilted into working with the wrong person. Many realtors are highly motivated by commission cheques. Their pressure tactics are good for one-time deals, but because their service is transaction-focused and not client-focused they need new clients all the time. Repeat business goes to competent and pleasant professionals, not unpleasant sharks. As a result, it’s normal that, at first, you meet more sharks. Don’t despair. Pleasant and competent agents exist and they can make your life a lot easier!  

Above all, listen to your gut. You want to have a feel for a person’s ethics, level of competence, and familiarity with the market you’re doing business in.  Your realtor’s competence directly affects the quality and types of deals available to you and their professional style will affect how you experience making your investment decisions. 

Learn more on how to select an agent. Get your copy of The Mindful Landlord here.

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How to Make A Multi-Year Maintenance Plan For Your Buildings

5 Secrets of Effective Networking for Real Estate Investors

Should I Purchase A Single-Family Home?

Confessions of a Damage Insurance Broker: Making Choices in a Changing Insurance Market

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Interview with Jacques Amzallag: Top Damage Insurance Broker

The insurance industry is changing. Premiums are going up, and so are claims-exclusions.

It’s  a good time to hear from an expert in the field!

I recently had the pleasure of interviewing Jacques Amzallag, top damage insurance broker at Racine & Chamberland.

Here are some of the highlights of the interview.

Towards a “Hard” Insurance Market

What’s the difference between a “hard and “soft” insurance market?

 The insurance industry is cyclical, just like any other market. According to Jacques, the industry is moving into a part of the cycle called a “hard” market, where premiums go up, and criteria of admissibility for coverage goes down as insurer appetite for certain risks drop. Depending on the carrier, additional exclusions to coverage wording can also find their way into your policy.

 While some of this may be due to changes in climate and social and political situations such as the pandemic, we do well to remember that the insurance industry is a market like any other:  risk is priced into premiums based on coverage availability and loss potential. When additional carriers enter the space and offer coverage, this forces the remaining insurance companies to drop premiums to be competitive. In contrast, if insurance companies tighten up and exit from certain market segments, premiums to rise. It’s the law of supply and demand as it applies to insurance.

 Long story short, as we enter a “hard” market, we mustact with the knowledge of what this means 

Over- And Under-Insured: How Do I Know?

How do you know if you have enough coverage?

In a hard insurance market, landlords concerned with the price of insurance may be tempted to decrease their coverage to control costs. This usually isn’t a good idea, according to Jacques.

Before making decisions, make sure you understand a few key aspects:

·         Reconstruction cost: Many landlords opt to skimp on reconstruction costs in order to reduce the price-tag on the premium. This may not be the best idea, according to Jacques.

There are two problems. First, in the case of a total loss, the insurer might not cover the value needed to rebuild. In this case, the client can face trouble with the mortgage lender or with the rebuild of their investment.

Reconstruction value is also an issue in event of a partial loss. If you make a claim for a partial loss of the value of your property, the insurer will calculate replacement value and verify that you have priced the value of insurance correctly based on the co-insurance clause applicable in your contract. If the landlord has insured his property below the required ratio, the insurer will require him or her to become a co-insurer towards the claim.

Ex:

Example 1: Compliance with the Co-Insurance Rule

Cost to rebuild the building

1 000 000 $

Insurance limit in the contact

800 000 $

Cost of the claim

200 000 $

Co-insurance rule

80 %

800 000 $

X 200 000 $ = 200 000 $

800 000 $ (80 % of 1 000 000 $)

You will be compensated at 100%, which corresponds to the total value of the damage.

Example 2 : Non-Compliance with the Co-Insurance Rule

Cost to rebuild the building

1 000 000 $

Insurance limit in the contact

400 000 $

Cost of the claim

200 000 $

Co-insurance rule

80 %

400 000 $

X 200 000 $ = 100 000 $

800 000 $ (80 % of 1 000 000 $)

Because the condition was not respected, you become co-insurer proportionally. Instead of being compensated at 100%, that is for 200 000$, you will receive a compensation of 100 000$.

In an environment like today, it’s especially important to understand the rising costs of reconstruction. Most policies automatically increase the reconstruction amount from year-to-year to protect consumers, but as you renovate and as construction costs rise, these increases may no longer be sufficient.

Want to be 100% certain? Consider having the building evaluated for reconstruction cost by calling on a professional evaluator.

·         Replacement value: What’s the difference between insuring for depreciated value and replacement value?

It can be a lot of money in case of a claim!

Insuring for depreciated value means the insurer will pay out a proportion of any damage claims, not the full amount. If you have a claim, the cheque you receive will be for what it would cost to repair the damaged portion of your property, minus an amount for the age of the property. Careful: if you have a big claim, the discrepancy might be very large.

Make sure you understand the implications before accepting to insure for depreciated value.

 

·         Water damage insurance: The most common type of claim in Canada is related to water-damage. Given this is the case, scrutinize your policy or insurance quote for two things. (1) Any exclusions pertaining to water damage and infiltration. The most common fine print here has to do with hot water tanks, infiltration from the roof or sewer back-up.

Second, make sure you’ve correctly evaluated the cost of insurance required for repairing any issues. For example, sewer back-up insurance often comes in 10k slices. But are you sure 10k is sufficient coverage should you have sewer trouble? You could consult your damage insurance broker or a license contractor to give you a better idea to make sure your ball-park estimate is sufficient.

·         Earthquakes, Floods & Other catastrophes: Worried about being Chicken Little or having a Noah moment? Understand that the likelihood and cost of insuring for a specific risk is priced into the premium.

For example, flood insurance is usually pretty cheap. If you can get it, you may want to consider adding it. Unless, of course, your property is in a known flood area, in which case this coverage might not be available. That’s a detail you might want to pay attention to! If the insurers don’t want to go, it’s a possible indication that that particular risk is high, and likely expensive.

Earthquake insurance also causes a lot of head-scratching, especially in Montreal, where it’s hard to imagine this could ever be of serious concern. The add-ons for earthquake insurance are also quite expensive. Why – in a lot of cases with multi-unit properties – does the bank require the landlord to have earthquake insurance? You may want to do a little research. I almost jumped out of my seat when I read about this: Stilling quake risk in eastern Canada demands greater focus, awareness and effort: Swiss Re Canadian Underwriter

Want to learn more?

Watch the full interview here

Listen to the podcast here

How are you showing up in your Real Estate projects?

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Are you a carrot, an egg or a coffee bean?

Let’s find out!

I had the opportunity to interview Canadian Real Estate personality, Russell Westcott in a recent episode of the Real Estate Investors’ Club Podcast. With twenty plus years experience in investing and in motivating and coaching others, this master of sound-bites and West Coast wisdom has some great nuggets for both the more- and less experienced.

I’m going to share one really meaningful one here.

(For the rest, you’ll have to actually watch or listen to the episode!)

Russell relates a little fable to make his point.

The story begins with a teenage boy who’s down about the vicissitudes of life in the COVID moment. He comes into his mom’s kitchen shoulders slumped and begins complaining about the slings and arrows he’s facing.

His mother tells him: “Son, I’m going to show you something. Get three pots of water.”

The woman puts the three pots of water on the stove.

Once they’re boiling, she instructs her son:

“Go get me some carrots, some eggs and some coffee beans.”

The boy does this, and she has him throw each ingredient in a separate pot of boiling water.

After ten minutes, the woman says: “Let’s see what happened to what’s in the pots!”

First, they look at the carrots.

“They went in hard, now they’re all soft and mushy,” says the boy.

“What about the eggs?” asks his mother.

“They went in soft on the inside, and they came out hard.”

“Now what about the coffee beans?” she asks.

“Oh coffee!” exclaims the boy. “I love coffee.”

“You see?” says his mother. “The coffee beans changed the environment. The other two let hot water change them! All three had the same stimulus: boiling water. But only the coffee beans changed the state of the water, instead of being changed.”

Concludes Russell: “Every day, you have a choice. You can let the pressure make you hard. You can let the pressure make you soft. Or you can change the environment. You choose what you want to be – a carrot, an egg or a coffee bean!”

For the rest of the interview, click here to Watch  or listen to the episode.

Special Report on the 2021 Q1 & Q2 Rental Market in Montreal

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In planning for the up-coming rental season, it’s good to know what sort of weather we’re heading into. Are we talking about a flurry of vacancies or scattered showers of good tenants looking to move?

 

The data is wonky right now, and so we need to delve a little deeper to prepare ourselves properly.

 

According to data published on Rentals.ca and Padmapper.com average rental prices have declined across most Canadian cities. In Montreal, Rentals.ca reports a modest increase (4%) year-on-year while noting a month-on-month decrease of 1%. Padmapper’s stats are more depressing; their stats show rents have decreased an average of 13% in the past year.

 

What’s going on? How can rents go both down and up at the same time?

 

First, let’s correct for rent-control. As rent controlled units “turn over” and prices are corrected to market standards, rents are inevitably dragged upward. Consider a rent controlled unit (let’s say a 5-1/2 renting for 700$) where the tenants leave. The landlord renovates and rents the unit at today’s (pandemic afflicted) market value (let’s say 1200$ instead of 1400$ in 2019). The statistical average of rent prices across the market may increase even if current market value goes down.

 

Vacancy rates are high at the moment in Montreal (6%), according to CORPIQ.
This could lead one to understand that current market value for rent has and will continue to come down (say from 1400$ for a 5-1/2 to 1200$), but that rent controlled units turning over can still be corrected upwards.

 

What’s a landlord to do?

Economic and demographic trends right now will make it difficult to rent units at the same dollar amounts as July 2019. Sorry folks, but the cavalry probably won’t arrive by July this year. Foreign students and immigration likely won’t be back to normal levels by summer, and neither will tourism. Forget about maintaining the rental value of higher-end units in the downtown core and elsewhere. You may have to adjust your expectations downward by a few hundred dollars to attract decent tenants this year.

 

In lower-income brackets, the same might be true. Low-wage earners have been hit hard by the pandemic (CIBC estimates a 20% unemployment rate). Good tenants for lower-end units will likely be harder to come by this July.

 

A few tips.

5 Ways to Make the Most of Covid Restrictions

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Challenges & Opportunities for Real Estate Investors in 2021

“Not so fast,” said 2021 to those of us who were hoping to leave the Covid mess in 2020. Funny story from the property manager’s desk: bathroom tile is non-essential in Quebec. The plumber can make holes in the wall, but the maintenance guys can’t always buy the material to fix them.

 

**Shrug**

 

For all of us, boredom and social isolation are compounding like credit card interest.

No one said these next months are going to be easy, BUT – people – the time will pass anyway. Why not have something to show for it?

The question we should be asking is: how can I use this time wisely?
Here are some ideas.
 

1. Invest in Coaching.

 

Social isolation can be depressing. It can also be difficult to stay motivated and accountable if you don’t have to put pants on in the morning. One way to create deadlines and inspiration is to hire a coach, especially if the program they sell has action-items or deliverables. A bonus is the added FaceTime with someone (hopefully) inspiring to you.
Consider defining what skills you want to learn or level-up this year and invest in some coaching. What better way to use the March break budget?
 

2. Purchase Instructional Videos

 

What aspects of your game do you want to level up? Want to learn more about creative financing? Finding deals? Putting together joint ventures? There’s no time like the present to focus on the parts of your Real Estate game that might be lagging behind. Instructional videos are a cost-effective way to accelerate your levels of knowledge.

 

3. Focus on How You Can Leverage Technology

 

Environmental pressure is the biggest driver of evolution. In the face of stress in the ecosystem, species adapt or go extinct. Technologically there is a giant leap forward going on. A year ago, very few people used Zoom or ordered groceries online. Today my parents in their late-70s use these services. The rapid advancement, adoption and deployment of technology is going to be a lasting aspect of the Covid-crisis.
How can you leverage or become proficient at apps or online services that industry leaders use? How can you use technology to become more efficient in business and in your personal life?

 

4. Audit Your Personal Habits

 

Are the choices you’re making every day hurting or supporting your health, energy levels and success? Maintaining a healthy routine is definitely made more challenging with gym-closures and lack of access to social energy. The home office is also dangerously close to the fridge.
Wake up call: the choices you make now will have lasting effects, either negative or positive.
Take 5 minutes this evening to scan your personal habits and see if anything needs a bit of correction.
On the flip side: are you open to “hacking” your personal habits with technology? WeightWatchers has an awesome app for tweaking (or overhauling) your diet. You can also get the most out of your home gym with a work-out app like FitBod. It adjusts daily workouts to your equipment and fitness level, levelling up as you get fitter. It’s also a great way to combine points 3 & 4.

 

5. Separate Enduring Changes From Temporary Ones

 

When mass-extinction events have taken place in the past, the species that have ended up with a bigger “slices” of ecological Real Estate are the ones who’ve managed to adapt. As we go about our (constrained) daily lives, try to identify the trends that are going to be long-lasting.
Perhaps tenants- and home-buyers will continue to favor larger units as working- and training at home become enduring fixtures of the post-Covid world. Will the move to online education diminish the number of exchange students? How will this affect downtown rentals? Are the trends in the short term rental market likely to outlive Covid? What about the low-interest environment?
As you look into the medium-term future, do it with a mind to adapt to permanent changes, while not over-reacting to those that are not.

 

Yours in Real Estate Investing,
Terrie

The Great Debt Shift

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Do low mortgage rates have you thinking about pulling equity?
Are you blown away by the low number on your credit card statement?
You’re not alone.
Canadians have been saving more and racking up less consumer debt. One consequence of the pandemic is that credit card spending and consumer debt have decreased. On the other hand, low interest rates have many Canadians running to the bank to borrow more against their homes and income-properties. The mortgage lending sector is booming. You can listen to this week’s podcast for more analysis here.
What is everyone doing with their cash?
First, a lot of liquidity is seeking deals. The market for investment properties is hot, in part because so many buyers have pulled cheap cash in the hopes of acquiring more units. Debt coverage ratios are also affected by cheap money (as monthly payments go down, lending can be based on these lower numbers, which allows institutions to finance higher amounts). Banks are willing to lend more because interest rates are lower. With lending conditions altered to make buying more attractive, it’s hard to resist making offers.
The question is: are we kicking the can down the proverbial road?
Time will tell. It may seem like a good idea now to leverage to acquire more units, but will rising vacancy rates exert downward pressure on the price of rental property? At what speed will interest rates rise, driving the price of real estate down? Will an oversupply of condo units and employment uncertainty drag certain market segments down, influencing the supply of units across the board?
Without a crystal ball, it’s hard to know for sure. No one has the recipe for secret sauce!
It may be wise to think like the CHMC and introduce a “stress test” into your financial models. If you were hoping for a certain percentage of market appreciation, rent increases, or low vacancy rates, be pessimistic. Create a best-case and a worst-case projection. What about if interest rates bounce back when your mortgage term is up? How may your employment prospects change if the current recession becomes prolonged? What if finding good tenants gets harder?
Make sure your financial model is solid by broadening your horizon to potential negative outcomes. If your doomsday model holds water, don’t be deterred by analysis-paralysis. Even the wisest investors are operating on projections. Uncertainty doesn’t have to mean inaction. Make sure you account for a variety of possibilities, and flexibility will lead to sound decisions.
It’s better to build an arc and not to need it.
Happy investing!
You can check out the data for this Market Report here
photo Terrie Schauer Alex Avery

Interview with Alex Avery : The Wealthy Renter’s Real Estate Advice for Covid-19

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Real Estate Advice for Covid-19: What The Wealthy Renter Has to Say About Investing Now

How Are You Using your Covid-19 Crisis?

Covid-19 Crisis has us transforming confinement-psychosis into new pass-times. Amateur bakers and hair-stylists are popping up all over the place.

I admit I’m going through a lot of flour these days, but I also decided to have as many interesting conversations as possible. My goal is to connect with people who have insights, especially on Real Estate investing during the Covid-19 Crisis. Last week, I spoke with a favorite real estate author of mine, Alex Avery. His book, The Wealthy Renter, changed the way I look at home-ownership.

Is this a good time to get into the Real Estate market as a home-owner or an investor? See what the author of The Wealthy Renter, Alex Avery has to say. Here’s some of his Real Estate Investment Advice During the Covid-19 Crisis.

Is Your Home an Investment?

Avery’s thesis is that home-ownership (in the principal residence sense) isn’t the “investment” it’s touted to be. He’s suspicious of the advice that we must all “stop throwing money away on rent”. When he unpacks this statement, it appears as questionable investment advice. Home ownership makes investment sense as a premise if – say – a savings of 2000$ or whatever per month on rent justifies using a large amount of seed-capital (read: down-payment) to then carry a (possibly larger) mortgage payment.

For an investor, the answer is often “It doesn’t”.

Use Your Capital Wisely

In investment terms, capital should be placed where it generates the best returns (correcting, of course, for risk – eg. betting on the horses might give you good returns, but I wouldn’t recommend it as a sound investment). If we use our hard-earned seed capital as a down-payment for a single-family-home, our returns will be sub-par.
What return does this so-called “investment” generate?
  • It provides no cash flow or dividends.
  • Maintenance- and interest costs are out-of-pocket and not tax deductible.
  • Home owners have a tendency to spend MORE money on maintenance, upgrades and extras than owners of rental properties.
  • The mortgage on our homes get with after-tax dollars (read: with 50 cents out of a possible 1$).
  • We don’t have tenants to help pay our mortgage.
  • Yes, a principal residence is an appreciating asset, unlike – say – a car or a washer/dryer set. But then rental properties appreciate too.

Your Home as Consumption Not Investment

Avery’s distinction can be summarized as follows: the money you put into your home – in the form of a down-payment, as upgrades or as mortgage payments – is basically a form of consumption. If you have disposable capital and cash-flow that you want to “consume” in a single-family home as a lifestyle choice, go ahead. Avery himself admits to being a home-owner. But it makes more sense to view a principal residence as an object of consumption and not as an investment.

 

How Do I Make My Real Estate Plans in the Covid Crisis?

Avery has a few points of advice on this question.

  1. He advises that, if you have plans to buy a home, it may be wise to review how much leverage you take on. The economic downturn, he projects, will be more check-marked than V-shaped.
  2. As an asset class, Avery sees residential rental buildings doing fairly well. Federal and provincial governments have launched stimulus plans that secure the minimum income of the vast majority of workers. As a result, he doesn’t see massive residential rent defaults in the cards.
  3. Beware of commercial Real Estate. Commercial rentals were on a downward trajectory before the pandemic. Retail had begun to move online pre-Covid. Many companies were already running experiments in tele-work. The Covid Crisis will accelerate both of these trends, probably irreversibly.
  4. If you want to invest, choose a market with “land constraints”. For example, Toronto is bounded by the Green-Belt, the island of Montreal by water, and Vancouver by the sea and the mountains. Avery sees these markets as being more “recession proof” than, say, secondary markets like Quebec City, Calgary or Kingston. In the American crisis of 2008, markets like New York fared better than, say, Las Vegas, where builders could keep constructing ad infinitum.

 

When Everyone Has an Opinion, Who Should I Listen to?

Covid or not, Avery’s last piece of advice turns on where we get advice on Real Estate investing decisions.

  • Your father-in-law who bought his home in the 70s and hasn’t been in the Real Estate market since? Probably not the best source.
  • Your real estate broker who makes commission on home purchases or sales? Also not the best source of advice, because there’s an obvious conflict of interest at work (he or she gets paid when you sell or buy ANYTHING, not when you make good investment decisions).
  • Active players in the real estate industry. Investors, economists, experts with established track records in their field, or professionals make money whether a transaction takes places (accountants, independent consultants, property managers etc.). They are probably better sources.

Want to Learn More?

Purchase Alex Avery’s book The Wealthy Renter here.

Or check out my book The Mindful Landlord.

Quebec moves on July 1stPhoto by Matthew Hamilton on Unsplash

Why Quebec Moves on July 1st

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Factoid : Most Quebec leases end on June 30th, making July 1st “Moving Day” for the whole the province.

Read more

Montreal BuildingPhoto by Phil Desforges on Unsplash

Thinking of Investing? Learn How to Landlord Like A Pro

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User’s Manual For Rental Property

Want to avoid common mistakes made by new property owners?

There’s now a user’s guide! Introducing a new Online Property Management Course for New Real Estate Investors

When you buy a washing machine or an air-conditioning unit, there’s always an instruction manual in the box or available online. Same goes for a new- or used car. When I want to know how to jump-start my car or change a tire, I take the user’s guide out of the glove box.

How many times have I wished that my buildings had a similar booklets!

Sadly, investment properties don’t come with a manual. That’s why I created my online course:

Winning at Property Management in Quebec

Affordable Online Real Estate Course

Few quality and affordable resources exist for small landlords to educate themselves. For years I wished that after helping a new investor acquire a property, I could refer them somewhere. I wanted a resource to help fledgling landlords know what to do with their new investment.

That’s why I created “Winning at Property Management in Quebec”. My course takes the guess-work out of property management especially in Quebec, where tenancy laws are some of the most tenant-friendly in the country. There’s now a user’s guide for new landlords in Quebec.

What Do I Need to Know as a New Landlord ?

My course aims to cover keys points in investment property in Quebec. My goal is to help you learn how to effectively set up your rental properties from top to bottom. I want you equip you to pursue the ultimate goal of real estate investing: solid, trouble-free cash flow.

You will learn how to:

  • Maximize building revenues
  • Understand and lower building expenses
  • Effectively screen tenants to avoid problems before they happen
  • Structure leases to your advantage
  • Deal with typical problem-situations
  • Create a renovation & maintenance game-plan to protect your investment
  • Implement time-saving strategies that minimize headaches and risks

Finally, a bonus section will give you tips on Time Management in the real estate business.

Want to learn more?

Check out the course page here:

https://www.clubimmobilier.ca/en/activites/real-estate-training/winning-at-property-management-in-quebec/