FROM UNPRECEDENTED TO UNCERTAINTY
As we transition away from pandemic life and into … well, that’s the big question, isn’t it? What’s next? Lately we’re seeing some investors with a “confused mind that simply says NO.” But is this the right answer?
We get it, buying real estate can be confusing—that much is crystal clear! To buy single family homes, or multi-family? New builds or renovate/repurpose? Detached or condos/townhouses? And we haven’t even mentioned the challenging decision of choosing a location! Then what about the horror stories from Uncle Joe, and that guy at the gym, and that article from my stock broker, …. Worse, what about the recent real estate investment problem stories that are true? Documented by a security commission or a fraud charge?
On the other side of the uncertainty spectrum, we know that inflation is continuing to rise, with no end in sight yet. Leaving our money in a bank at 2%-3% interest means we’re actually losing money with inflation currently at 5.7%. So that’s clearly sub-optimal! It’s essential to put our money to work for us. I think we all understand that there are no guarantees in the investing world, so what options are safer but also earn more interest?
We literally had a conversation this week where a friend asked us, “so what’s a busy professional to do?” His point was simply that most of us don’t have the time and energy to become experts before we invest. We suggested that he has two main options.
Investing with someone you know, like and trust is the best way to leverage both your time and your capital. Is this truly passive investing? We can be blunt people, so let me just say “no.” Your money is your responsibility. Before investing it anywhere, you’ll need to ask a lot of questions. And you’ll need to learn—not to be an expert, but to know enough to understand the risks and benefits, and how any particular strategy would fit into your life, your portfolio, and your goals. There will be a few costs and some time involved; for example, every real estate investment should be described on paper (these days digital paper), with lawyers. What else? We recommend investing some time into a conversation with your accountant to plan how your real estate investing will impact or benefit your taxes, today and in the future.
The second option we suggested to our friend is the DIY (do it yourself) approach. Begin with some learning and investigating. Some people have one coffee and realize that real estate doesn’t work for them; they simply prefer stocks, bitcoin, EFT’s, …. But if the initial background research attracts you, there are many in-person and online courses opening up in 2022. We encouraged our friend to check out a few of them. Then we suggested finding the groups and educators that really resonate with his style and goals. Grow fast? Local or provincial groups? Women’s groups (ok, maybe not for this particular friend).
Whether he decides to build his financial future one property at a time, or whether he goes all in for rapid acquisition, we encouraged action. Hoping for clarity, wishing for an easier path, and dreaming of a lottery are all unlikely in today’s world. Begin with some conversations, books, courses, etc…. We’re here at any point in his journey. And we love to chat real estate investing!
Connect with us anytime, or follow us @mtnedgerenos and @mtnedgedevelops.
