I was reading the Globe and Mail online today when a link on the side caught my eye. The title "Could investment in a second property go sideways?" I chuckled. If you have to ask then you shouldn't be buying a second property...
However, there are so many "Real Estate Riches" seminars that tell you how great real estate is (which it is) showing the insane returns possible (which there are) because of the leverage a mortgage allows. The allure is strong but the hours, days and years of WORK after the thrill of buying your investment is almost never covered.
I want to tell you, as a seasoned investor, that the most important thing you should think about when you buy a second property is it going sideways - and what your Plan A, B, C to X will be.
When you can handle any situation that your property throws at you, you are a real estate investor.
Bad Things that have happened in my rentals:
Floods
Mould
Death ( Natural and Unnatural)
Evictions
Destruction
No rent
Huge Renovations
Tenant Bankruptcy
Midnight Moves
Good things that have happened in my rentals:
Exponential ROI
Excellent tenants that improved the property
Insurance Funds coming through
Helping tenants become homeowners
Getting my initial investment out and still having the property
Mortgage free ownership
Cashflow every month
Repairs on or under budget
Increase in flexibility/time/freedom
It's ying and yang! No investment is all up and no down. That's just a life fact and yes - it even applies to investments.
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