Here’s what we’ve learned the past 10 years
My wife recently reminded me that we’ve been investing in property for 10 years. So, to celebrate, here are 10 practical lessons that we’ve learned through our experience and mistakes about investing in property for the past 10 years.
Small Action is Better than No Action
Possess the land little by little. When you take the right small steps continuously, you will get BIG results!
Have Cash Reserves
If you run out of cash reserves, it is game over. You stand the chance of losing everything that you’ve built up. It’s as simple as that.
You Make your Money When you Buy
When you buy a property below market value, the chances are that you will make a great return on your investment.
Use your Own Conveyancing Attorney
The service I get with my own attorney is always better, and the costs are significantly less.
Apply for Financing at Multiple Banks
Don’t assume that your bank will give you the best financing. We’ve often gotten a better deal from a different bank.
Register your Bond for More than what you Bought the Property for
When you refinance in the future, you do not have to apply for a second bond; you can merely take an advance on your existing bond, which is much easier to do and cheaper.
Renovate (Not too Much and Not too Little)
Don’t overcapitalise on your investment properties and spend more than what is necessary. Also, don’t delay fixing problems or allow your property to deteriorate.
Avoid Property Registration at Year-End if Possible
People often move at the beginning of the year. If you purchased a vacant property that is only going to register at year-end, be aware that your chances of having the property vacant into the new year are higher.
Rather Accept Lower Rent than an Empty Unit
The math is simple… Having your unit vacant for a month or two is much worse than dropping your rent and immediately placing a (good) tenant in your property.
Be strict on Rental Collections
Debtors will always pay the creditors who shout the loudest first. If your tenant pays late, take decisive and severe action.