Are you paralyzed by all the negative headlines? Or are you uncertain and undecided because the path to growing your money appears risky, maybe even dangerous? Yet at the same time, you probably know that doing nothing won’t help you reach your financial freedom any time soon.
So what’s a regular person to do to invest for retirement? We do a ton of research, and then we make the best possible conscious choice about growing our investments. There are 7 basic categories of risk in our real estate investments: tenants, property/location, partners (JV, bank, private lenders), financial, markets, government regulations and the wild cards.
Can you feel the sharks swimming up behind you? Yikes! So work the problems to make it safer. Be especially thorough when screening tenants, or hire a property manager to do that for you. Study your location at the provincial, city and neighbourhood level; and for goodness sakes, get a great home inspection. Your lenders will always do their homework on you—but remember, you have choices out there. Your homework is to ask your financial partners lots of questions to make sure they’ll fit for your project and your common goals. Financially set yourself up for success by investing for positive cashflow, then mortgage paydown, then property appreciation (markets have gone up and down for as long as anyone can remember). Learn about the real estate market cycle, and where your community fits today, and where it is likely going. Are you using the optimum investing strategy for this phase of the market cycle? Maximize your chances for success at every corner. Government regulations and wild cards are beyond your control. However, by analyzing as many other details as possible, you will minimize your risks and be able to adapt when those wild cards roll through.
We don’t gamble with our money, and we don’t speculate. We follow economic fundamentals, social and demographic trends (eg millennials), and local market conditions. We carefully and meticulously analyze risks when compared to possible Return on Time and Return on Investment (ROI). It’s a little boring, no glamourous sales pitch here!
What will you do with your investment dollars? Beware the sharks, but don’t stay stranded on the mini-iceberg forever. Make a conscious choice based on your vision for your financial future.
