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Disclaimer: Estimates and information are for illustrative purposes only – these are not to be relied upon.

Although the Buy and Hold strategy may be a longer journey to financial independence than some of the other real estate investment strategies out there, slow and steady wins the race. It’s a good one to start with if you’re just thinking about getting into your first real estate investment or real estate purchase, in general. 

11 years ago, I purchased a condo with the intention of it being my primary residence. I couldn’t afford pricey Vancouver with just my income alone, so I bought 45 minutes away, in Langley. I was able to put down only 5% of the $265,000 price tag. Little did I know, the $13,250 to buy that condo and then the patience to hold on to it, was the creation of a growing real estate portfolio. 

We often talk about the down payment amounts as if it’s an easy sum of money to come up with; I know this isn’t the case for many Canadians. People’s eyes glaze over when I talk about budgets, but it’s necessary to budget your expenses in order to save enough to continue investing into real estate. Budgeting money and eliminating unnecessary expenses gets real estate investors further. Here are some examples:

Starting and then growing your real estate portfolio will initially be from your cash savings or investments; then it will be from three sources: 1) savings from your job 2) your home’s equity 3) your monthly cash flow from the real estate portfolio (when you own a home and rent it out). 


Ultimately, the quickest way to replace your 9-5 job with steady real estate investment income is to look at buying duplexes/homes with a secondary suite – basically, anything that allows for 2 units to be lived in on one property. This method generally works this way: one unit will cover most, or all,of your carrying costs, while the second unit is pure cash flow. I usually focus on finding a home that has at least a 3 bedroom suite on the main floor and at least a 2 bedroom suite downstairs. If you find a home that has the possibility of having the floor plan reconfigured to fit this model, then that will ensure you are maximizing rental income and also building sweat equity into the home. 

Here in BC, I look for homes that are $400,000 to $600,000. These homes can bring in up to $1,400 in positive cash flow each month, meaning an investment can earn $16,800 in your pocket annually. Many areas of BC have near 0% vacancy rates, in most cities from The Okanagan and Interior, over to Vancouver Island. Although property values are more expensive in BC than in other provinces, rental incomes are high and the market appreciation rates over the long run have averaged out to about 12.8% per year, over a 4 year period. 

The real power house behind the strategy that I’ll walk you through, isn’t finding a home that you believe will appreciate the most. Instead, focus on purchasing a less expensive home in an up-and-coming area. The magic formula is finding a home that can be purchased for $400,000 to $600,000, where the main floor suite can rent for $1,800-$2,400 per month and downstairs, at $1,400-$1,500 per month. This formula will result in high monthly cash flow. 

If you are able to self-manage the properties, it can be as little as 5 investment properties in BC to replace your $95,000 annual salary, in a 9 year period. 


One thing that I try to encourage investors to do is manage their own investment properties. If not, then it brings that $1,400 cash flow down to about $950 or $1,000 per month. The key to this is to find good tenants that are willing to do some of the little things so that you aren’t called to replace a light bulb or fix a leaky sink. They do that themselves and then major issues are resolved by you organizing plumbers, electricians, gutter cleaners, etc. If you can’t view the work yourself they’ll send pictures of the completed work and then charge your credit card… Simple.

Fig: Cash flows with and without a Property Manager

The hardest part is purchasing the first property. This usually comes from your cash savings from your job, or investments that you have liquidated. Then, as you will see from my projected timeline, if you have patience for your first investment to build equity on it’s own, while continuing to save, years 5 to 8 illustrate the explosive moves that you can make in growing your real estate portfolio. 


To cash flow, consider cities that are on the outskirts of capital cities or surrounding cities to major airports. For instance, in British Columbia, think of duplexes in:

-Mission, Abbotsford, and Chilliwack INSTEAD OF Vancouver

-Nanaimo and Sooke INSTEAD OF Victoria

-Vernon and Penticton INSTEAD OF Kelowna


In surrounding cities, the rental income is nearly as strong as in major cities, yet the property’s purchase price is much lower. This results in healthier returns and can almost always bring in a couple to a few more hundred dollars per month, because your monthly mortgage cost is lower. 

$50,000 of a mortgage amount will result in roughly $240 more per month for your mortgage payments (this depends on your mortgage rate, I used 3.19%). If the rental amount is the same in a major city as a neighbouring city, yet the purchase price for the home in the major city is $50,000 more. The home in the neighbouring city will most likely cash flow approximately $240 more per month. 

The surrounding cities are also appreciating in value, as more residents push their way outward from major cities when they become too pricey. So it makes for a smart long-term real estate investment move.


Maybe you already own a principal residence, or are renting and saving to jump right into real estate investing, the key is to take action and own at least one property to begin with. With a conservative 3% market appreciation, along with annual mortgage paydown, you will most likely have enough equity in your property to refinance it at the required 80% Loan-to-Value ratio (LTV) in about 6 years. That means, you need to leave some of the equity in your home, but can take out a sizable portion of remaining equity and use it towards buying another home. 

When you focus on cash flow, you eliminate most of the risk for recessions and real estate market dips. People will always need a place to rent and with your home having two rental units, you most likely will never face a completely vacant home, meaning, your carrying costs will be paid for by one of the units. 

Let’s say that your first home or investment is $450,000. At a 3% growth rate, the total equity that you could have in your home is the difference of the Current Home Value and the Mortgage Balance. Whether you have put 10% or 20% as a down payment on that home, the equity can range from approximately $192,000 to $237,000 (you can sometimes put 5% down, just talk to your mortgage broker first). 

When you speak with a mortgage broker about taking out this equity to use it against another home, they will only let you take out a certain amount of the equity. It’s usually about 80%, but speak with a mortgage broker to find out what you are capable of doing. Refinancing your home should be in your real estate growth plan, as it’s going to help finance a future property. 

Fig: Equity Buildup to Refinance

I encourage a minimum annual savings of $5,000 from your job income. That is the annual savings amount that I used each year in the model, along with 100% of the cash flow that you will be saving from your income property/ies. Any maintenance expenses have been built into the model, but remember, if you find good tenants, they will do the majority of minor upkeep and maintenance on your home.

In years 5, 6, 7, and 8, you will be using the cash flow saved each year from each property, along with your job savings. The cash flow starts off as $1,217 per month. 

Each passing year, you will increase the tenant’s rent and continue to save. Once you can afford to own two of these cash flowing duplexes, which is forecasted to occur near the end of year 5, then your monthly cash flow will grow to $3,286, which is just shy of $40,000 per year. 

Fig: Time frame demonstrating cash accumulation and acquisition years

Around the 6 year mark, you will need to work with a mortgage broker to refinance your home. If you have done recent home improvements, a home appraisal will capture the new fair market value and should result in enough equity to pull out for another home purchase. With the three properties, you will realize about $5,150 per month or just over $60,000 per year.

Along the way, ensure that you are raising each tenant’s rent each year, to keep up with current market rental rates. This will help you build your cash flow savings faster, plus it will be a more attractive home for buyers, if you ever list the home for sale. 

As you can see, with the extra cash flow coming in from these homes, it makes it much quicker and easier to save for the two remaining homes to complete your portfolio in years 7 and 8. 

In year 9, with 5 homes, your monthly income is approximately $9,400 or $112,000 per year. Your real estate portfolio now generates enough income to provide you with the freedom and flexibility to choose how you want to spend your time. 

About the Author:

Danielle Roy is a Vancouver-based Realtor, previously working as a CPA and the owner of a Vancouver accounting practice. She currently owns 6 rental suites and works with real estate investors on pursuing their own financial independence in Southern BC, along with all other buyers and sellers. For more information, visit