Posted on April 7th, 2012
PRLog (Press Release) ? Apr 06, 2012 ?
Mark Turcotte does fit the profile of an aspiring real estate mogul. Four ?years ago he was working as a retail Manger,. Today, he owns six homes in Barrie Ontario and is on the hunt for more.
What drove him into this sector? It was a close friend that got into the business as a sale representative. I wanted to support his new career and started looking into purchasing investment properties in Barrie. The mortgage criteria was a lot easier back five years ago then it is today. I really had so much passion for the this new venture that I needed to find away to do this full time. That opportunity came a knocking about three years ago. I was in a position that I hated, my boss was a control freak. So then I finally made the move, took my courses and the rest is history. Now being a full time real estate agent in Barrie and an investor as well, I never looked back. I became successful right away, for sales commissions ?first year in business smashed the rookie record at my brokerage Sutton Incentive Realty located in Barrie.
?Real estate is fantastic because it?s secured money into tangible assets,? says the Barrie-based real estate investor and Real Estate Agent. ?It?s a hedge against inflation; it?s great for tax reasons.? It?s also proven to be largely immune to the type of short-term market volatility that we?ve seen in recent years.
That?s not to say the Canadian housing market is without risk or price swings. Still, Turcotte says he isn?t worried about talk of a housing bubble forming in Canada. While she?s aware of the risk, she says she?ll be content as long as she continues to receive a steady steam of income, which is about $800 a month per property after taxes and expenses, and can pay down my mortgages. Any positive cash flow goes towards reducing the principal.
For him, it?s not about scoring a huge windfall, but rather security. One day he plans to sell her properties and use the proceeds to fund his retirement. To work, his real estate investments simply need to keep up with inflation and continue to provide a steady stream of income in retirement.
For those adventurous enough to get into real estate investing, Don Campbell, president of the Real Estate Investment Network, says it is possible to get a yield that either equals or exceeds many dividend-paying stocks, not counting the price appreciation on the property. He explains the key to being a successful real estate investor is to approach it the same way as you would a stock. In other words, look at the fundamentals, invest for the long-term and own something that pays decent dividends.
That?s the difference between an investor and a speculator, he says. An investor analyzes markets, looks at economic indicators and doesn?t care that much about whether housing prices rise or fall. A speculator buys a house with the expectation that its price will increase and then sells it to make a quick buck.
As an investor, finding the right property takes work; it?s not a good idea to buy another house on your street just because you like the area. Campbell says that investors have to look at a plethora of economic data, including an area?s job market, GDP growth and infrastructure developments. He adds it?s also important to consider for any new developments in a neighbourhood that could make it more popular, like a hospital or subway.
The idea is to find a place where the demand for rental properties and the monthly payments will increase every year. It?s not about buying the cheapest house, says Campbell. ?If it?s cheap that often means rents are incredibly low as well, because demand is low.?
After reviewing the economic data, and narrowing down a property, you should be aiming for a yield that is as good?if not better?than what you?d earn in the stock market. The calculation for your annual yield is straightforward: add up all revenue and subtract all expenses?including maintenance and your lending costs?to figure out your cash flow, then divide that figure by your down payment and multiply it by 100 to express it as a percentage.
Buying an income property isn?t that different from buying a primary residence: you just have to provide your lender with a lot more information. Besides handing over the regular documents?T4, T1 General, proof of employment?you need to demonstrate to the lender why the rental property is a good investment. Campbell puts together a binder with all of the information that led him to that house in the first place, such as an area?s GDP and job growth.
He also says that while you can typically get the same interest rate on an investment property as you can on a regular home, there is sometimes a 0.25% or 0.5% premium added to the rate. But with rates so low, Campbell says there?s never been a better time to buy. ?In 1985 I was paying a 16% interest rate,? he says. ?If you?re planning to own for five years or longer, now?s an unbelievable time to get into the market.?
Turcotte, who says income properties in Barrie are a better buy than in Toronto, plans on purchasing even more homes. The only thing stopping him is money, but he?s ?starting to work with partners, so he doesn?t have to take on all the risk herself. My plans are to form a tight group of real estate investors that have the same goals as myself, and this is starting to come together. ?I did my first joint venture with some partners last month, and hope to continue our relationship and build on it for the future.
Ultimately, there?s no limit as to how many homes I can hold in my portfolio. ?Do the math and know what you can buy,? he says. ?If it works, the number of properties you can own is infinite.?
If you are looking for a solid agent with experience and with a background in real estate investment visit http://www.newbarrierealestatelistings.com
Article source: http://www.prlog.org/11843512-real-estate-agent-investor-mark-turcotte-buying-investment-properties.html
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