Special to QMI Agency
Can would-be Toronto real estate investors still make money in the GTA market and is it right for you? These are questions to which noted Canadian author and real estate investment coach, Julie Broad, provides some insight in her new, number one Amazon best-selling book, More than cash flow: the real risks and rewards of profitable real estate investing.
Broad was in Toronto last week for a book signing at Indigo at Bay and Bloor where she talked about her wealth-building strategies. She provides a very real look at investment from a personal perspective. As a seasoned investor herself, she’s learned from experience and provides a wealth of practical knowledge and strategies for first-time investors.
The key is to start early and not to expect immediate returns. “I’m a big believer in real estate being a great way to give you financial options in the future. I don’t think it’s a fabulous way to make a ton of money today.” says Broad. She started investing in real estate at age 24, looking to grow wealth while completing an MBA degree.
Can a young couple earning reasonably good salaries actually realize success in condo investing, or is it fraught with caveats and pitfalls, the sole domain of experienced professionals?
“A couple with dual income, they might not be able to get their dream home and buy an investment property, but if they make a few smart choices when they’re young, real estate is the best thing, because the time in the market is really what makes you wealthy.” says Broad. “We’ve had property managers rob rent money from us, we’ve had really bad tenants. These are the things that we’ve learned, that a lot of it’s preventable if you know what to look for.”
Toronto is a unique market; a mosaic of separate, distinct neighbourhoods and every two blocks can make a huge difference. “Toronto, more than any other market in Canada, requires you to get specific on your property type and your neighbourhood because what is happening in High Park housing is totally different than what is happening at Yonge and Bloor for condos.” says Broad.
One of the fundamentals of investing in the GTA is to capitalize on the burgeoning population growth. According to Broad, the trick is to figure out where and what those people want in a home. “Toronto is a huge market and understanding what to look for to spot up-and-coming areas and up-and-coming opportunities is critical to success. That said, investors can feel comfort in the fact that the Toronto population is growing and is forecasted to continue to grow.”
A resident of British Columbia, Broad has been traveling the country presenting seminars and promoting her book. While in Ontario last week, she explained the investment advantages of high-growth regions surrounding Toronto. “If you can’t make the numbers work in the GTA, Toronto investors also have the advantage that when you head outside the GTA to areas like Hamilton, Guelph and Kitchener – Waterloo, you can still find population growth, job growth, improving transportation and options where you can make the numbers work based on purchase price and rent rates.”
In the book, Broad explains the ins-and-outs of rental income as an important factor in paying down the mortgage. “The mortgage pay down is something a lot of people don’t think about but your tenant is really saving you a lot of money every month.
On the flip side, Ontario investors have to deal with laws that very heavily favour the tenants more than the landlords — which makes tenant screening and property management a critical element to success.”
In an excerpt from chapter nine of More Than Cashflow, Julie Broad provides a checklist for evaluating cashflow:
At the point where you’re ready to make an offer, you know what you want to get from the deal. Your initial evaluation tells you it’s going to be close to neutral cashflow or positive cashflow each month so long as:
· You can buy it for the price you want to pay.
· The expenses are not more than you’ve estimated.
· The rent is what you’ve estimated it to be, or higher.
· The property doesn’t need any major repairs.
· You can get the terms you would like.