Valuable lessons from real estate investing in Canada

More and more people in Canada are turning to investing in real estate as a means of earning a decent income. Some of them have even made enough to put in their papers and start working for themselves. Here is one example.

My real estate investing career in Canada started slowly when I picked up my first property after many months of ‘should I, shouldn't I?' I had some good information from a friend and decided that it would be foolish not to buy. Fortunately, while I was procrastinating, prices for the property I wanted had dropped from $89,000 to $45,000. There were reasons for this drop. The property was on the outskirts, and there were some complaints of it being used by drug addicts.

However, I had spent most of my life in the immediate neighborhood and unlike other buyers who were scared off by the story of drug trafficking, I knew the true potential of the area. (By the way, I did find evidences of drug abuse in the apartment. But that's another story). I also spoke to some family and friends who were living nearby and came to know that the area was being cleaned up.

When I decided to buy, I put in an offer of $32,000. The owners countered with $40,000. I re-countered and the deal was finally done at $35,000. I did not have that kind of money. So, I took an advance on my credit card and borrowed some money from my dad. I also applied for a collateral mortgage with the bank, who appraised the property and gave me the green signal shortly.

After this, I started work on renovation. The rooms were mostly unused. So, my main job was to take care of signs of dilapidation, like cracks in walls and broken pipes. I got these fixed. Then, I decided to refurnish the rooms with decent carpets, a coat of paint, proper lighting (it's amazing what lighting can do to a room) and some nice curtains. The finished apartment looked nothing like before. The cosmetic makeover looked good and it did not cost me that much.

The appraiser put in my new appraisal at $60,000. I had made a clean profit of $17,000, after my expenses. A good way of making money quickly. From start to finish, the process took less than 3 months.

I am thinking of refinancing so I can buy a new property in another part of the city. I am looking at several properties. What I am keeping in mind is that I want something that is a little bigger this time, so that I can sell it to executives or someone from the corporate world. I feel that real estate investing in Canada has just come of age, with more and more executives looking for affordable housing. It's a gold mine for people who have the nerve to put their money on the line for something they believe in.