I have chosen to focus my investments on owning rental properties in British Columbia because to me, it’s what I felt the most comfortable doing. I have always had a general interest in real estate and try to read and study everything real estate related, so focusing on real estate investments just felt like a more natural investment channel for me. More so than heavily investing in indexed funds.
“There is nothing wrong with a ‘know nothing’ investor who realizes it. The problem is when you are a ‘know nothing’ investor but you think you know something.”
– Warren Buffett
You can say that I fell into real estate investing 10 years ago, when I bought an apartment and then my family rented it from me. A few years later, my family moved out and I had my first arm’s length tenant move-in. And then another tenant.
My investment was 45 minutes away and I had become comfortable with what was involved with managing a property on my own and I could see that MOST of the time, there weren’t any issues or anything for me to do, other than cash the cheque on the 1st of the month.
Through my journey, I started realizing what was involved with managing a property and a tenant. A good tenant will let me know that the washer is leaking and will stop using it, while I quickly call a repair person to fix the leak.
It is that mutual respect that ensures your investment is kept in the best shape. I don’t let my property fall apart, I fix something immediately because I realize that the tenant is depending on it to be fixed, so that their life isn’t disrupted.
I don’t need to be a handyman to manage my own properties. I just need a list of reliable contacts to call.
With anything, you build more confidence with time and experience, so my little 2 bedroom apartment investment gave me the comfort to buy a detached house. I wanted a house with a suite so that it would generate 2 sources of revenue. However, with my budget, I could only find a few single family homes in Vernon that could be converted with a suite addition. Instead of 45 minutes away, now I was looking to buy over 5 hours away.
I did my due diligence with the rental market in Vernon and ran different financial models and was very impressed with how the property performed on paper. I decided to visit the city of Vernon for my first time… and buy.
8 months of blood…almost… but definitely sweat and tears went into that renovation, and about $80K. The downstairs suite was to be rented out, once again, to family. The upstairs suite – well it was the end of November when I finally was ready to do showings and it was a quick turnaround to try to find someone for December 1.
Finding great tenants for my apartment was key to having less issues. That is something that I realized from early on and wanted to continue to find great tenants for the Vernon property and any future properties. I felt like that was the magic behind being a successful landlord.
As part of the tenant screening process for Vernon, I decided on a family that could move in on January 1, which left me with one more month of vacancy. It was well worth the wait.
The house was set to perform as per my financial calculations. Now let’s see how managing a property over 5 hours away goes and if any other sneaky expenses or issues arise. Does my strategy work and lead to other out-of-area properties?
Tune in next week for Part 2 of a multi-part series.
View my LinkedIn post here!