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TIPS FOR REAL ESTATE INVESTORS IN OTTAWA

Why do we choose real estate as an investment?   It’s tangible, it’s reliable, and you can control your asset (somewhat).

If you’re reading this, you’ve probably already researched the benefits of real estate as an investment vehicle, so I’ll jump right into a few points to consider to make sure you’re investment is a good one.

Yes, your numbers need to make sense.   Take some time to understand cashflow, mortgage paydown, and appreciation.   These are the 3 avenues for generating profits through real estate investing.   And once you have a solid grasp of how the numbers work (I’ll cover this in a separate post), then it’s time to decide which direction to go.

You will want (need) a solid understanding of neighborhoods in your city.  I can give you detailed insights into Ottawa’s areas and what the demographics of each are.   Hit me up and I’ll be happy to break it all down.   Bottom line, go with a good area.   By ‘good’ I mean a desirable area will you would want to live, or where successful people want to live and where they feel safe.  And try to be as close to the trendy spots with the local shops and with amenities such as parks, beaches, transit, restaurants, cafes, etc, etc… you get the picture.   Again, consult with the local expert for best advice.

Now, the KEY POINT THAT I CAME HERE TO MAKE IS THE TENANTS.    Your tenants are the make-or-break factor for long-term real estate investments.  For most ‘smaller’ investors out there, this is the crucial element with your building.   Here’s the pros of having great tenants:

  • rent paid on time without issue

  • tenants stay long-term (less turnover)

  • apartment is kept in good condition (they take care of your place)

  • you receive less phone calls & complaints

  • your neighbors will be happier

  • higher rental amounts (higher quality tenant = higher rent $$)

  • building or property becomes more desirable overall

Now, when you end up with bad tenants, here’s what can happen:

  • late rent payment, if any

  • chasing tenants for money

  • damage to unit & building (they can do a tremendous amount of damage)

  • potential lawsuits (laws in Ontario favour the tenant)

  • higher tenant turnover

  • unhappy neighbors

  • lower rent prices

  • de-valuation of building/property

  • endless complaints and fighting with landlord & tenant

How do you protect against bad tenants?   

  • Charge higher rents.   High rent prices keep the riff raff away (sorry if this offends anyone)

  • intense screening process

  • background & credit checks

  • call all previous landlords and employers and all references

  • investigate their personality and habits (do they smoke?  any pets?  what do they do for fun?  etc)

  • tell them you’re doing routine monthly walk-throughs during the tenancy

  • ask the tenant to prepay for a number of months (this helps determine if they have money or not)

I’ve had numerous landlords tell me they’d rather have a unit sit empty as opposed to having bad tenants.   At least an empty unit doesn’t get damaged or threaten legal action or break windows… you get the picture.

Hopefully this helps and gives you some take-aways for the importance of choosing good tenants.   Be patient and make sure to choose the right people to live in your very expensive asset!

Here’s a video where I address many of these points.  

CHRIS STEEVES
 
Sales Representative. Residential & Commercial.
Capital Homes Realty
217-1419 Carling Ave, Ottawa, ON
Office: 613 744 0356

Visit our website:
WWW.CHRISSTEEVES.CA
 

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