When you look at a house, what you see depends on a lot of factors. Let’s start by assuming you will look at the house for investment purposes (aka not your future home). Investor A might see all the possible expenses, risks, and problems. He or she might even hear a cash register noise: chaching! Meanwhile, Investor B is looking at potential upgrades and better ROI (return on investment).
If you’re like Investor A and see the bills adding up quickly in this house (and that scares you before you even walk in the door), trust your gut. Maybe your investing style prefers condo’s or REIT’s or new builds (with a warranty). Forcing yourself to buy a property because Uncle Jo (or some other helpful soul) says it’s a good deal—is simply not your key to financial freedom.
However, some people will look at a house with a bad roof, or flooring that needs repairs, or old windows … and they will see potential. Maybe you can make money from day 1 by getting a great deal! Or maybe the house can be rented for an extra $300/month once repairs and painting are done? Some investors look at all the problems in a house—but rather than feeling discouraged, they see opportunity to solve problems, create cash flow and grow long-term wealth.
We would never suggest using rose-coloured-glasses—that’s far too risky. If your style of investing is to add value to an under-performing property by doing repairs, there are several ways to mitigate your risks. Start with a solid home inspection. Then take that list to your favourite contractor(s) for a rough estimate. Don’t release your inspection condition until you are almost certain that the numbers will work for you.
There is no one “right” style of investing. And yes, houses need repairs, maintenance and improvements on an ongoing basis. But your fears and stresses need to be addressed before you even purchase that first investment property. One solution is to use an investor-focussed contractor like us! Mountain’s Edge Renovations has been repairing and improving houses in Calgary and the surrounding communities for 11 years now. We would never say that we’ve seen it all, but we sure have a lot of solutions ready for whatever comes up!
