Monday, 13 January 2014
The Sharks of Buying Rental Properties
Being a new Canadian investor can be a bit like dipping your toes into a shark tank. There are professionals and tradesmen who could take a big bite out of your wallet . When many first time investors take that plunge into the investment property game. They may be armed with little or no knowledge about the game. While you can’t learn it all right away . Asking important questions and taking a few precautions might save you injury.When dealing with the biggest investment most of us will make, unscrupulous mortgage brokers can put you in harms way. Realtors can lead you into making a bad decision.|These sharks can cost you an arm and a leg. A few precautionary measures can help protect you.
When dealing with contractors I do not like to pay them until the job is done. Paying first can make you the side project . Or worse yet they start and never finish. Also it’s a good idea to get it in writing . Have the two of you write down exactly what you expect from them and what they expect from you . Have it signed and dated. Mortgage brokers can be great but giving them too much power can land you on the hook for surprises . Ask questions , read the details of the contracts. I recommend asking for the underwriters contact information. And start your own dialogue about what to expect . When choosing a Realtor ask friends or family who they used and would they recommend them. Communicate what you are looking for with the Realtor and ask what kind of commitment they expect from you . Many will ask you to sign a contract making it exclusive . Check around , is what they offer typical for the industry.
It would be a book in itself to cover every possible danger . Cover your basics . What’s the reputation of this professional ? Remember to get it in writing . What’s expected of you and what’s expected of them ? The devil is in the details , or is that the shark ?
Glenn Brown is owner of My Rental Unit property management and has enjoyed success with multiple unit investing.