Have you taken a hard look at your savings/retirement accounts recently and discovered that they are not at the level you hoped they would be? This is a common problem that many residents in Saskatchewan face as they start to look toward the future. Whether you are just starting your professional journey or reaching retirement age, planning for your financial future is critical to lifelong enjoyment.
If you are worried about waiting too long to have a strong investment portfolio, fear not. Just because you didn’t start investing when you were 25 years old does not mean it is too late to do well for yourself. Real estate investments can be highly profitable and generate plenty of consistent income depending on the strategy you choose.
For those interested in learning how to improve their financial situation as real estate investors, here are a few keys that will be crucial to your success.
Choosing an Investing Method
While real estate is just one piece of the investment puzzle, there are many diverse opportunities within this sector through which you can generate income. The first step is to choose one that is the right fit for your financial objectives and lifestyle. Are you able to dedicate a lot of time to your investment strategy? Then maybe you can make it as a house flipper and learn to sell homes for top dollar after buying them at a low cost and fixing them up. Are you more interested in generating just a little extra income with little to no effort? Then investing in a real estate investment trust (REIT) might be a better option.
Research the Market
Whether you invest in a rental property in the charming city of Lumsden or a commercial property for sale in Saskatoon, research is crucial before you purchase real estate. You need to make sure that you are getting a fair value for the property and that you will be able to rent it or sell it to earn a profit. This comes down to how much research you do. What are rental rates for similar vacation properties nearby, and what amenities do they offer? Are there a lot of renters in a particular geography, or do most people look to buy homes there? Is the local economy in that market on the upswing, or are businesses retreating from the area? A deep understanding of the market where your property is located will help you determine if the investment will be profitable.
Network with Investors and Real Estate Industry Pros
While a determined attitude and plenty of research can result in successful real estate investing, you may not reach your earning potential if you go it alone. Knowing the other stakeholders in the area who are either in the investment space or the real estate industry will provide you with a valuable network. Real estate agents can help you research properties and find the right space. They can also connect you with reputable contractors for upgrades and inspections. Investment clubs often pop up so that people with similar financial goals can share connections and advice. The larger your network, the easier it will be to find the resources you need.
Acquire the Right Funding
All investment methods require funding at some level. Whether you are just investing in a REIT or buying a whole apartment complex, that money upfront needs to come from somewhere to start earning you additional income. There are many ways to fund your real estate investment properties. First, you can take out a home loan or personal loan. You could also get a home equity line of credit to take advantage of the equity in your current home to fund an investment property. For larger rental properties, a debt-service coverage ratio loan is ideal. This type of mortgage takes into account the projected income of a rental property rather than your personal assets, so as long as you can provide the down payment and have a good credit score, you can get a loan for a larger rental property. Nailing down your funding is necessary to acquire the property you are interested in.
What Strategy Will Help You Meet Your Goals?
Real estate investing is by no means a guarantee of profits. It often requires a lot of hard work and knowledge to generate income. However, if you are willing to put in the work and have the resources to invest, real estate in Saskatchewan can be the solution to your financial concerns. Choose a strategy that fits your lifestyle, research the local market diligently, network with other investors and real estate industry experts, and understand the available financing options to optimize your chance of success as a real estate investor.