Are you planning to purchase an investment property in Regina, Saskatchewan?
Every investment property purchase carries a potential for long-term returns. While every investing decision requires some luck, most of the success comes from thorough research.
As real estate investors, it's crucial to understand the market, your budget, long-term predictions, and many other variables. Making sense of everything is an important step to take before signing any contracts and invest in real estate.
This article will cover our major recommendations for buying investment properties in Regina. Follow these nuggets of practical advice to make better investment choices and boost the chance of gaining solid long-term returns.
Check the Metrics
A property investment is driven by quality data. You need to evaluate the statistics and various data to understand the potential of your investment property. For instance, you may want to consider local employment structures, population growth, general demographics, historical trends and data, and other major risks before committing to an investment.
The risk metrics are especially important to consider when your hard-earned dollars are on the line. For example, a large job cutback in the area serves as a vital indicator of the economic hardships. However, never rest on numbers alone. Try to make sense of the reality behind the numerical data.
Do a Rent Survey
How much monthly rent do you need to command to make the investment property work for you? There's no knowing before conducting a comprehensive rent survey. Only then can you, as rental property owners, see what potential the property really has.
The key is to look at comparable rental properties in the area. See how much rent similar properties in the neighbourhood currently charge. After doing this, make sure there's a demand for the type of rental property you are planning to invest in. You can determine the demand in an area by checking the occupancy rate of similar investment properties in the vicinity.
Get a Property Inspection
The initial rental property inspection can be carried out by the investors. You should check the property for flaws that may create bigger problems down the line. Also, it's important to understand what improvements have already been done.
Here are some of the things you should check:
- What's the situation in the basement? Are there any odours or mouldy patches on the surfaces?
- Has the roof been replaced recently? Does the roof need to be repaired?
- How energy-efficient is this rental property? Can you take affordable steps to make it better?
- What kind of appliances are inside the property? What condition are these appliances in?
Next, you should have a professional inspector do a thorough inspection on the property. That person should check all of the vital components of the property to ensure that it's all set for the long run.
If the inspection uncovers serious flaws, you may skip the purchase or engage in further talks with the seller. You can show the inspector's report and argue on considerable price reductions should there be any serious issues with the property.
Assemble a Team
Having a team of professionals working on your side is a fantastic asset when planning and maintaining your investments. Here are some of the professionals you should consider getting on your team:
- An appraiser who can provide an accurate evaluation of the properties you are considering investing in
- An experienced real estate agent who has intimate knowledge of the local property market
- A real estate attorney who has your back for all things legal, including an understanding of Saskatchewan landlord-tenant laws
- A lender who can get the necessary funding for your needs
There will be other roles that are necessary for your team as well. For example, a rental property needs regular repairs and maintenance. This is the moment to consider the services of a professional property manager. You'll save time and money on self-managing your rental unit.
Plan Your Cash Flow
The incoming cash is a critical part of your property investment. As investors, you need to evaluate all the stages of your rental income. Make room for repairs, maintenance, and potential renovation expenses.
Management company fees could take a small bite out of your cash income as well. Before making any investments, list all your expenses and see if everything works out in your financial plan.
Have an Exit Plan
When you invest in real estate there is considerable potential to boost your rental income and foster long-term growth in your personal wealth. However, you should always keep unexpected future developments in mind.
As with anything else financially substantial, you should have a contingency plan in place. For example, you may face a personal emergency, or you may want to conduct investments in other areas. There may be a moment when you need to sell your rental units.
Examine Your Options
Sometimes things don't work out exactly as you planned. You may have to deal with a stagnant market and even the exit plan doesn't seem to work out. There's no need for desperation as options always exist for investors.
When it comes to difficult market conditions and overcoming these difficult times, you could pick the wholesale option. Another route you can take is offering your potential buyer a lease-purchase solution.
Consider Professional Management Services
Self-managing stress and the time investment are too much for many landlords. That's why you always have the option of partnering up with a reputable company. These people will take care of your various responsibilities, including rent collection, maintenance, repairs, and evictions.
Property investing is a potentially lucrative activity. Before you sign a contract, it makes sense to analyze your budget, market, and options available to you. All successful investments have something in common. It's solid decision-making that rests on research and knowledge.