The Perfect Real Estate Investors Tool

As a real estate investor we all know that our network is our net worth. For any real estate transaction the is a buyer, a seller, and a lander. The Real Estate Connect Center helps you make those very connections.

This amazing tool is available by subscription. There is a one time fee of $1997 then $39.99 per month. However, I am able to offer you this amazing tool at the great discount of $19.99 per month with no one time fee, and you will also get the first month free to try it out. I'm not sure how long this great offer will last so be sure to register TODAY. Click here to get this great offer.

Action Plan

I am proud that my sister is following in my foot steps and has acquired her own real estate investment education package. She been taking her courses and putting it into practice. Recently she came to me and asked "Melanie, how are you making it work? What are you doing?".

The strategy that works best for me to have success in my real estate business is my Action Plan that was at first put together for me by my mentor. So to help her move forward with her business I put together a presentation explaining how to put together a strong action plan.

I would like to help you in your real estate business as well so I am making this presentation available to you as well.

All you need to do is click here and fill out the access form. There is no fees, and I will not be sharing your email with anyone else.

Smart Phone In My Business

I have to chance to interact with a lot of other investors with my work with Rich Dad Education, with my work with the Investor Cashflow Club, and with my day to day networking for my own real estate investment business. We discussed investment strategies, on going deals, and how we run our businesses. Time and time again I am asked how I manage my business on road and how I purchase properties from afar. It's simple, I have a Smart Phone, and I use it to it's capacity.

So today I've put together a presentation on how I use my smart phone in my real estate business; and the different apps that make running my business easier.

These are the apps I've come across and started using to better my business. I find new one all the time. If you use an app that is helping you run your business, please take a moment to comment about it on this blog.

Information Wednesday

On November 19th 2014, I was the guest speaker for the information series "All About It Wednesday" that the Didsbury Municipal Library is organizing. I talked about Lease Option (Rent To Own) it's benefits and how it works.

As promised to those who attended, I made a video of the presentation to review the information covered. Since the video file is too large to email I have posted it here on my blog and will be sending the link.

I you have missed the event or would like to attend again; I will be presenting at the Olds Municipal Library on March 25th 2015. The presentation will be made available to other libraries by video conference. In the meantime, here is a video recording of the presentation.

To get a copy of our brochure detailing our Lease Option Program in more detail or to find out more please contact us by email.

Are You Ready??

I wanted to talk about retirement, are you ready? Will we ever be able to comfortably reach that goal?




I also came across an interesting article on Money Sense website. It can be viewed here. I wanted to give my opinion on this. The following is a copy of the article... The red font is my opinion.

10 things they won’t tell you about retirement

The best-kept secrets of life after work.

by Craig Sebastiano 
August 14th, 2008

From the July/August 2008 issue of the magazine.

If you’re like many middle-aged Canadians,you used to think that you would retire at 55. Now you’re hoping for 65. Once you used to smile fondly at the retirement ads that showed laughing grey-haired couples golfing in tropical paradises. Now you have an overwhelming desire to jump out of the sand trap and smack those smug retirees with a nine iron.

We feel your pain. So let us reassure you. Despite what you may think, there is a lot of good news about retirement. We’ve talked to a wide-ranging selection of financial experts (Ahhh, the experts. Did you know I was once invited to become a financial advisor. When I decline and said that I didn't know the first thing about financial I was assured that it was very simple. All I had to do was take a weekend class. Really? That's all this person had to do to tell me how to best handle my finances. Also is this so call financial expert employed by a bank, who would be making money from my RRSP account or are they employed by financial companies also making money from my retirment account. Is there not a conflict of interest there?) and we’ve come away with one conclusion — you’re doing far better than you think you are. Join us as we reveal 10 things that most people don’t know about retirement, but should.

1. You’re not behind at all

The ads make it sound as if 55 is a reasonable retirement age. In fact, for most of us it’s not. The median retirement age in Canada is 62 for men and 61 for women, according to Statistics Canada. Who does retire early? By and large, federal government employees, who ditch work at a median age of 58. You can credit their early departures to generous pensions that are indexed for inflation. But even public-sector employees aren’t hanging up their work clothes at 55.

If you look at the math behind retirement, you can see why most of us stick around the office a bit longer than we might like. For every year early that you retire, you pay three penalties: you lose a year of potential savings, you lose a year of growth for your retirement savings, and you gain one more year of retirement expenses. (oh good! I feel so much better, I'm not behind by not retiring at the age of 55. In fact 55 was never even feasible for me. Well there goes my day dream that kept me on trucking at work.)

Consider a woman who hits 55 in good financial shape, with a paid-off condo and $100,000 in savings. She can count on her savings to produce $4,000 or $5,000 a year in returns, but she’s too young to start collecting Old Age Security or Canada Pension Plan. Unless she resorts to desperate measures, such as selling her condo or burning through her savings, retirement is impractical. (I have to say, this woman did well. If she went to university and graduated at the age of lets say 20 and then entered the work force. Paid off her student loans, purchased and paid off a condo, probably had a few kids and put them through college as well. She was still able to save $100K. Wow. Too bad they suggest that will only be worth 4 to 5K a YEAR.)

But look at what a difference five years can make. If she buckles down and contributes $10,000 a year to her retirement fund during that period, and achieves a 7% annual average return, her savings double to $200,000. That bankroll can generate $8,000 to $10,000 a year in income as long as she lives. At 60, she can also start collecting Canada Pension Plan. If she combines those sources of income with part-time work, a phased-in retirement becomes quite practical. (a 7% annual average return... after the fees of 2.5% (which is average) and I'm assume they are considering inflation (3% a year) and of course a market that as gone straight up with no downfall, she made a return of  over 12% annually. Wait a minute there is no way that was in mutal funds, where is this return coming from then? Savings? Hahahaha... nope)

2. You’ll live longer than you expect

When we’e doing our retirement planning, many of us figure that we’ll live to 80, the average lifespan in Canada. But that average is misleading. It reflects what a newborn baby can expect in the way of lifespan and is dragged down by all the unfortunate people who die relatively young.

If you’ve managed to reach 65 without suffering a terminal illness, you’ll probably live considerably beyond 80. According to StatsCan, a 65-year-old man can expect to live to 83; a 65-year-old woman can look forward to blowing out the candles on her 86th birthday.

And remember — those are averages. Half of retirees live longer, some much longer. Moshe Milevsky, an associate professor of finance at Toronto’s Schulich School of Business at York University, says there is a 41% chance that at least one member of a 65-year-old couple will live to 90. So even if you don’t quit work until 65, there’s a good chance that your retirement could still wind up spanning a quarter or more of your life. (okay, so financial "experts" have been having us save to last until 80... but we will out live it. Chances are at 90 I will also be in a senior home, so higher living cost.)

3. You’ll see more of your partner — a lot more
Sure, you love your spouse, but let’s do a little math here. Chances are, for most of your married life at least one of you has worked outside the home. Subtract sleep, travel time and other away time and you’ve seen your beloved for— at most — six hours a day.

In retirement, that figure can easily double. And continued exposure can cause even happy couples to bicker. Fred and Janet Barnes (not their real names) retired to Dickey Lake, Ont., to renovate a cottage after living in and around Toronto for most of their lives.”His perfectionism drove me a little crazy,” says Janet. “My slapdash methods were hard for Fred to take.” The Barneses eventually figured out ways to divide the work so they wouldn’t get on each other’s nerves.

Other retired couples strike different bargains — maybe the kitchen becomes her territory, while the garage becomes his — but whatever the specifics of the deal may be, the important point is to realize that retirement is not just a financial journey. It’s also an emotional odyssey and you should plan ahead to make the most of it.

Beginning in your 50s, you should start thinking about the activities that will fill your day in retirement. “You’re going to need to stay connected,” says Dr. Randy Swedburg, chair of the applied human sciences department at Concordia University in Montreal. Your many options include going back to school, giving your time to charity, or starting your own business. (So in the name of making the marriage work, we will need to get out of the house and fill our lives with other activities. Sure, that's what I planned to do with my retirement anyways. Not stay cooped up inside) 

4. A part-time job is worth $400,000 in the bank

If your retirement savings are a bit smaller than you had hoped, take heart — a part-time job in retirement can go a long way toward making up for an undersized portfolio.

Let’s say that you can make $20,000 a year from your part-time job. That is about what you could reasonably expect a $400,000 investment portfolio to generate in retirement, says Terry Greene, a fee-only planner with MSC Financial Services Ltd. in North Vancouver. So your part-time job is the financial equal of a $400,000 portfolio. Especially if your part-time job consists of doing work youenjoy, you may find that you never want to fully retire. (Take heart?? First you tell me I don't get to retire at 55, now I don't get to retire at all? And that my $400K investment will only now offer me a return of 5% when before I could grow it at a miraculous 12%? Ya... take heart)

5. Your employer really does love you

The first wave of baby boomers has already hit 60. Millions more will soon hit retirement age. And there are not that many people coming up behind them. “The demographic trends are suggesting that over the next 10 to 15 years, we’re not going to replace the workforce that currently exists,” says Ted Emond, a senior consultant with Hewitt Associates, a human resources consulting firm in Toronto. (WOW! Does anyone else see the bad news here, Babyboomers are just starting to retirer. Millions more will do so soon as well. They will start taking money out of their retirement accounts. Millions of people will be taking the value of there income out of the stock market which controls our mutual funds which is what is in our retirement account in the first place. The stock market moves on buying and selling power. Selling power moves the price down. Some think, myself included, that we will soon be faced with an other market crash.)

The likely result of Canada’s aging society is a potential labor shortage that will make skilled help more and more valuable with each passing year. HSBC Bank Canada, is already attempting to keep older employees in the workforce by letting them work part-time while collecting pensions. Wal-Mart Canada allows its retirees to come back as consultants or to mentor current employees. Count on more employers to do the same as demographics makes skilled employees tougher to find. (So since we have now learned that we don't get to retire at 55, and that we actually don't get to retire at all really. We now found out that it's okay because our boss is going to need us anyways.)

6. Government is more generous than you think

The financial planning industry likes to cast doubt on the future of Canada Pension Plan. In fact, CPP is on solid financial ground after the reforms of a decade ago, according to the federal government’s chief actuary. CPP (or Quebec Pension Plan in the case of Quebecers), combined with Old Age Security, will provide you with an average of $11,500 a year if you’ve worked in Canada your entire life and retire at 65. The maximum you could qualify for is about $16,600 a year. (Ok, let's look at this, we have the millions of babyboomers ketting to collect this right away. How is it funded anyways? By the contribution of the current work force. Is that the same employees our boss is about to run out of?)

Don’t forget, too, that you’re eligible for a Guaranteed Income Supplement if you’re a low-income retiree. “For low-income [earners], government programs are going to provide you with the standard of living you’ve always been used to,” says Malcolm Hamilton, a consulting actuary with Mercer, a benefits consulting firm in Toronto.

7. You may be missing free money

A Sun Life Financial survey found nearly 40% of us have access to savings programs in which our employer kicks in money to supplement what we contribute. But one in five
of us who are eligible for such plans doesn’t participate. As a result, we lose guaranteed returns of 25% or more. (If RRSP contributions, let's say, are matched by our employer it provides if nothing else a protection against the 50% draw downs we have seen in the market. In the last ten years, that as happened twice.)

You should inquire with your human resources department to make sure you’re not missing out. Many publicly traded companies offer employee stock ownership plans with an employer match. If you buy $80 of your company’s stock each month through such a plan, your employer kicks in an additional $20 a month — an instant investment return of 25%. Other companies offer retirement plans in which the company matches your contribution dollar for dollar — a guaranteed return of 100%. In either case, the money is free and you should grab it.

8. You don’t need a million bucks

Financial planners like to say you’ll need 70% of your current income in retirement. To hit that goal, a middle-class couple will need to amass a million dollars or more in savings. But is the 70% figure truly a good estimate of what you need in retirement? (No. You are right, it is not. Not with all the activities I have to do in order to keep some distance away from my husband to save my marriage. And not with the traveling, and life experience I've waiting my whole life to enjoy during my "Golden Years")

Probably not. Brian FitzGerald, co-author of The Pension Puzzle and chief executive officer of Capital G Consulting in Toronto, says
you have many more costs while you’re working than while you’re retired, so your need for cash in retirement is considerably less than the 70% figure suggests. “There’s a bunch of expenses you don’t have to incur in retirement,” he says. For instance, most retirees no longer have to worry about paying off a house, funding their kids’ education, making RRSP contributions or commuting to work. And they pay substantially less in income tax because they’re earning less. (But what about the activities and travel? And have you forgotten I am still working, at least part time.)

So how much of your current income do you really need to maintain your standard of living in retirement? “I’m pretty confident that 50% will do the job for most people,” says Hamilton, the actuary. Of course, if you want to live lavishly and travel constantly, you will need more, but if you’re happy to go on living much as you always have, replacing half of your working income should do the job. (So, according to Hamilton. Now that I am retired and no longer working 8 hours a day, and doing the 1 hour commute; I should be filling this extra time with... what I have always done before? I guess we could spread out the cleaning to take a full day instead of a few hours... Who I am kidding, I hate cleaning I'm not doing any more of that. But if I'm going to be unreasonable, and wish to travel; I better be saving my buns off into my retirement account when I get the chance.)

9. RRSPs aren’t always the answer
Canada has five seasons: winter, spring, summer, fall, and RRSP time. But while we’e annually bombarded with ads telling us to stuff money into our RRSPs, don’ think of those four-letter contraptions as your only option in retirement planning.

RRSPs are not your best strategy if you have high-interest debt, such as a credit card balance. Given the 18% or more you’re probably paying on your credit card debt, you should first devote every available dollar to paying down that costly debt. RRSPs may also not be your best option if you’re a low-income earner, since the tax savings that result from making an RRSP contribution aren’t worth much if you don’t pay much tax to start with. (Hallelujah!! The first retirement advice that does not include RRSP.)

If the federal government goes ahead with its proposal to introduce tax-free savings accounts next year, RRSPs will have an additional competitor for your attention. Ottawa’s proposal, as it now stands, would allow each of us to put up to $5,000 a year into a tax-free savings account, or TFSA. You won’t get any tax deduction
for doing so, but your money will grow tax-free. And you will be able to withdraw the TFSA money without paying any taxes. While the math gets complicated,”I would think people with below-average incomes are better with TFSAs,” says Hamilton, the actuary. (Oh but still a registered account, still in mutual funds. Still at the mercy of the market with high hidden fees.)

10. There’s a world of possibilities 
One option that can instantly multiply your retirement spending power is to leave Canada behind. Mexico, Costa Rica, Malaysia and Panama all enjoy far better weather than we do, and much lower costs of living. “Overall, there is no question you can live here on one-half to one-third what you could in any Canadian city and have a good lifestyle,” says Tom Dawson, 54, who with his wife, Donna, moved to Panama City nearly two years ago from St. Albert, Alta. The 1,800-sq.-ft. condominium they bought overlooks the Pacific Ocean and the Panama Canal, and cost them less than $200,000. Medical care is excellent, locally grown produce is cheap and foreigners who retire to Panama with a pension can qualify for several tempting tax breaks, including an exemption from property taxes (That's right, if you really want to enjoy your retirement leave the country! Leave the children and grand-children, the friends and the relatives. Who needs them anyways. Because this plan does not include the cost of frequent travels or of maintaining a secondary house in your home country.)

I trust you realized that the majority of the red text was in a sarcastic tone. We really need to come up with a font for that. Your current retirement plan may not be enough, but there are other solutions out there other then stocks and mutual funds. You may have to step out of your comfort zone a little bit. But, in the end, we may not have any other choice.

Long Distance Investing

I get a lot of questions about investing in a different province and how I go about obtaining a new rental property without ever seeing it. In fact I received an email about just that this week so I decided to make it the topic of this Q&A.



If you have more questions on this topic or if you would like to submit a new question for future Q&A please e-mail me here. Be sure to put Q&A in the subject line.

Good To Know: Today's Education

I'm straying a little bit from real estate investing this week, but I've come across information that I think is very important to look at. This is graduation time and a lot of our graduates are answering serious questions. This maybe something they should be made aware of first.

 

Step On It: Take Action Today

This weekend I was working at a 3 days basic stock trading event held by Rich Dad Education. Our speaker was no other then Andy Tanner who is one of six Rich Dad's Advisor. What an honor that was and what a great speaker he was. 

 

Andy is full of fascinating information. He has created the four pillars of investing which is a great program that I strongly recommend from the little bit I was exposed to this weekend.

"Let me guide you through you financial education to discover the 4 pillars you must know to achieve the success you desire. - Andy Tanner"

You can hear from Andy Tanner on Rich Dad Radio, he was aired August 18th '12, September 22 '12 and November 10 '12

He spoke of the Financial Analysis on the Sovereign level, mostly for the U.S.A. It's a grim picture! What is coming, will not be pretty. If you have invested money the traditional way in the stock market, the best thing you could do is get some education now to protect yourself. The minimal thing you should do is to demand a protective stop on your current investment. Your bank or stock broker will recommend not to do this, they will not want to do it, and they may not know or be able to do it. But you should have that talk with them... NOW!!

Part of the problem with the US Finances.

 

Step On It Monday is normally on how to keep momentum with real estate investment, but protecting any other investment if they are at risk in the market, that should be addressed now.

What A Life: Working Cows

Late post today, sorry about that. We were vaccinating our calves today and taking part of the herd out to pasture. It was a full day's work. We were lucky to not be rained on.

First we had to take the cows in.

Then separate the calves from the cows.

Run them through the chute and vaccinate them.

Our boys were the young helpers this year.

And the bulls had a testosterone face off.

What Are You Reading?: Rich Dad's Cashflow Quadrant

In his book, Rich Dad's Cashflow Quadrant, Robert Kiyosaki describes the four different people that creates the world of business.

1. E (employee) - These people believe strongly in getting good grades in school so that they can get a good job. They are looking for a safe secure job with benefits.

2. S (small business owners/self-employed) - These people will be of the belief that if you want something done right you do it your self. Most of the time they will work by themselves.

3. B (Business Owners) - These people own big businesses of 500 or more employees. These people look for good systems, good networks and the smartest people they know to run their business.

4. I (Investors) - These people have their money work hard for them.

The poor will be on the left side of the quadrant under the E and S quadrants. They believe in working hard for your money. They work for security. If these people can not work, they get  no pay. They work for active income.

The Rich will be on the right side of the quadrant. They seek freedom, they do not want to be dependant of a job. They have people or money working for them to create money.

 

Robert is a very passionate man with a crystal clear vision. However, earlier this week I have found an artist sharing the same message as Robert, in his own style. Very powerful video title "The American't Dream". A must watch!!

Good To Know: Why Real Estate?

For the first post of the Good To Know segment I figured we should cover why invest in real estate in the first place. When starting to investment to obtain financial freedom, it only make sense to get your advice from the people who are living your dream. If you ask "How do you become wealthy?" you may get very different answers, but in the end the right answer will come from someone who as become wealthy.

So, what do the wealthy invest in? There are three answers to that question.

1. Paper Assets (Stocks): Stocks holds a special place in my heart. That is where we started. But, having done both stocks and real estate; I have to admit there are some cons to stocks. There is a big learning curve, mostly because we learnt technical trading, not fundamentals. We learnt to read charts, what each individual candles are called, what patterns they form to recognise the trend, the support and points of resistance. To make decisions on the fly. Although I love stocks, based on what I've learnt; I'd have to say real estate is easier to start. (please take notes, I am talking of stocks, wealthy people do not invest in mutual funds or GICs)
2. Business: The wealthy will own multiple business. It's a good investment. The difference is what a lot of us will view as a business is in fact being self-employed. If you are currently a business owner, ask yourself this; "How long can you leave you business without it been affected?" A business, in an investment term, should be able to run itself.
3. Real Estate: If you've come to my blog, chances are you know real estate can be a good source of investment opportunity. The wealthy know this as well.

So lets discuss real estate. Why should you invest in real estate? Let's look at the PRO's and CON's.

PRO's:

• Appreciation: In general, the value of a property goes up with time, this is called appreciation. With almost any other purchase the truth is the opposite, the minute you drive your new vehicle off the parking lot, the value of that car as taken quite a blow. But with real estate, well, land is the only thing we can't make anymore of. Now, we know better then to assume appreciation is guaranteed with the history in the US or even Calgary in the last few years. The real estate market will have it's up and downs, but in general, in the long term, the value will go up.
• Forced Appreciation: Stocks will be worth what it is worth. They go up and down, and there is nothing we can do to control that. In real estate however, you can purchase a property, give it a new coat of paint, update a kitchen or bathroom, or maybe a little landscape and you can force its value to go up. You'll have to be very careful in taking into account the cost involved into such renovation but it's nice to know you can have some influence on the value of your property.
• A Strategy For Any Market: The housing market will go up, will peak, and will fall just to start all over again. It is what it is. A four-plex in one province could cost less then a $100K while around here, in Alberta, that might not even get you a condo. The price to rent ratio may vary a lot from place to place. Property values are high here, and so is the rent, but on average the price to rent ratio as been better in the eastern provinces. It may be very hard to find a house to purchase so that it can be rented and make money after all the expenses are paid. This is how most may look at real estate investment. Buy a property, rent the property, and hopefully make money. Good idea, may not work everywhere. But there are other strategies. No matter where you are, you can make money in real estate in your area, all you have to do is use the right strategy whether it be Buy/Rent/Hold, Lease/Option, Wholesale, etc.
• Cashflow: Real estate can put money in your pocket each and every month. It's amazing to realise that you can create a source of income aside from your job. People!! That is security. Peace of mind. Could be your retirement. Your financial FREEDOM!
• Mortgage Paydown: So you purchase a property, and you rent it. Your tenant pays for the mortgage and expenses. This property can bring you money every month and eventualy your mortgage could be paid off completely and you didn't pay any of it. This is powerful stuff!! Does your mutual funds do this for you? No?!? Huh!
• Leverage: Sometime you will come across comparison that will should what, on average, different investment will bring you over the course of a few years. Mutual funds will be compared to real estate and show that it is in the lead. $100K in mutual funds on average may make more then $100K in real estate. Well there is a few things to point out. First to obtain $100K in real estate you probably will only have to come up with 20%. They don't give you mortgages to get stocks or mutual funds. Also an average return on mutual funds can be very deceiving in how it's presented. Let's say the first year your $100K investment when up 100%; that would mean you would now have $200K. Great for you!! The next year it goes down 50%. Well take away half and you have and you are left with $100K. The average annual return in this case would be +100, -50 = 50 divided by 2 years and it's 25. On average, this stock as performed at a 25% gain annually. Well then how come after two years, you are back to square one?
• Accessible To Everyone: Everyone, if they so choose, could invest in real estate. If you are a retired couple that live off the sale of your house by holding the mortgage since the house is paid for anyways. If you are a house owner who as lowered the mortgage payment by renting out the downstairs apartment. If you are an individual who is teaming up in joint ventures with other real estate investor to purchase multi-unit residential properties. Or if you are slightly down on your luck, with no money for investing and a bad credit, you could still wholesale properties without ever having purchased or qualify for a mortgage. Isn't it amazing that real estate can cather to everyone. If they so choose!
• Refinancing: Let's say you have purchase an income property at a deal and you put down 20%. In the first term of your mortgage, you where able to spruce it up a little. Now it was already a deal when you purchased it, then you forced it's appreciation with some minor renos and the regular appreciation. It is time to renew your mortgage and you can take the appreciation out of your property and pay yourself that initial investment back. You are now making money on a real estate investment that as none of your own money tied up into it. Huh! What should you do with that returned deposit? Well gee I don't know?... Maybe do it AGAIN, and AGAIN.
• Power Team: In real estate you surround yourself with your power team. These can be your lawyers, accountant, mortgage broker, realtor, property manager, etc. You do not have to understand and know every aspect involve in real estate financing; your power team can take that burden for you.
• Emotion Interference: When trading stocks, one of the hardest thing we had to learn was to control our emotions. You place a trade, you have the target profit area where you want the stock to go and you also have your protective stop where win or lose you get out of the trade. So the plan is set. But now however, you are going to watch that candle move, in the wrong direction, possibly becoming a loosing trade. The temptation to adjust that trade is HUGE! Well in fact, at first, we did interfere and tweaked the trade to minimise our loss. In the end causing more loosing trades. Even when all we were risking was $5. The prospect of having a loosing trade was too great, and there was only so much time to react. With real estate, although emotions can get involved. There isn't that ticking clock demanding an immediate answer. You can step back, re-evaluate if needed, or contact your mentor who as more experience and get his or hers opinion.

CON's:

• Bad Tenant: There are bad tenants out there, I've had them, other real estate investor as had them and although they make for an interesting discussion topic when getting together with fellow real estate investors; they can be a big source of stress. This stress can be minimised! We describe lease-option or rent-to-own also as the perfect tenant program. Think about it, if you rent a house to someone who intends to purchase it, and they put a substantial deposit on this arrangement upfront; the chances of them becoming bad damaging tenants are low. These are future home owners, tenant-buyers. Also I minimise that stress by not dealing with the tenant at all. Property managers are always part of my power team when I purchase a new property. That's what they do for a living, they are good at screening to get good tenants into the rental units, they handle the calls or complaint and running after the rent money.
• Work Of A Landlord: Want to go fix a broken sink at midnight on a weekday? Being a landlord can be a lot of work. It could easily become a full time job. And if it does become a job, guess what, that is no longer financial freedom. That is why, as I already mentioned I employ a property manager. Because honestly the chances of me hearing the phone at midnight are quite slim, and I know nothing about plumbing, and I live in the country on a farm; my rental properties are nowhere near me.
• Limited Access To Mortgages: There will come a time, when investing in real estate, that the bank will feel you have enough mortgages. Trust me on that. Unfortunately your credit score, and debt to income ratio can only support so many mortgages. And after your personal home mortgage, your rental mortgages and your farm mortgages they may be reluctant to give you anymore money :) Doesn't mean you have to stop there. If that was the case, some of us would never even get to start. That is where joint venture partnership comes in. Team up with someone who as the money and the credit to obtain a mortgage. You bring in your skills and get  the deal together and they show up and sign the papers and can now share and profit from a rental property without having to put any work into it.
• Power Team: Wait a minute!!! This one was in the PRO's now I'm putting it in the CON's? Well, yes. You see, everyone is different. For me, the power team is a PRO's, their combined skills and knowledge is definitely an asset. But for my husband, it can be more of a CON, because he hates talking on the phone, or making small talk with strangers. And until they are establish, your power team members will be strangers to you. In stocks, you are the only person involved whether you make money or not. You are fully accountable. In real estate, you have to rely on people, make sure they are as skilled and knowledgeable as they need to be.

There are many PROs and CONs, but in the end I feel the PRO's outweighs the other, but we all have different comfort levels. Where do you stand? What is your favourite PRO?

This video is a great interview discussing why we should invest in real estate.

Melanie