A lot of my clients are experienced investors. However, I also work with first-time investors as well. For those folks who aren’t planning on using their new property as a primary residence and haven’t bought and sold investment properties before, there are some things I generally go over before we even consider touring the first unit:
- Buying a property for zero down and renting it out expecting you’ll make a monthly income after dues, taxes, and expenses is highly unlikely to happen. Perhaps you can find a really under priced dated unit and are able to do the renovations yourself but in general, investors experience short term losses and reap their profits in the medium to long term at selling time.
- Especially if it’s primarily an investment property, buying a pricey unit today that is in a hot building may not leave a lot of head room for appreciation a few years out. Consider units that are attractively priced and/or in areas that are still developing (and priced accordingly).
- Run the numbers. Make sure you whip out your Excel and see what your monthly costs, taxes, and expected resale value will be to see if the figures pencil out. If the numbers don’t work out on paper, they probably won’t in real life either.
Hope this helps!