Page 28 - Real Estate Now Sept-Oct 2021

Something to consider when it comes to basement apartments is actually living in it yourself! I got my start in real
estate by purchasing a home with a basement apartment and renting out the main floor while I lived in the basement
apartment. I was able to charge a higher rent, allowing me to pay off the mortgage more quickly and ultimately make
my way up the real estate ladder. If you’re going to purchase a home with a basement apartment, or are considering
adding one to your current home, I really do recommend living in the basement portion yourself if possible!

Identifying risk factors
As with any investment, you need to identify the potential risks. There are four main risks to consider before purchasing
an investment property.
Financial
You need to spend money to make money, but owning an investment property does come with some financial
risks. If you can’t find tenants for an extended period of time, you’ll need to cover the mortgage out of your
primary income, which may leave things a little tight.

Property location
Do some research on the neighbourhood to see if there’s a high demand for rentals in the area. If not, you may
struggle to find people willing to commit to a lease. It’s also a good idea to ask a REALTOR® about the projected
evolution of the neighbourhood. If it’s an up-and-coming spot, you may find yourself getting a great deal! Other
things to consider include transit access, proximity to schools and daycare, nearby amenities, and access to the
highway.
Age of the property
Older homes can be appealing for a vintage look, but they may end up causing you more issues than they’re
worth. Homes over a certain age will likely need more frequent (and more expensive) repairs, which will ultimately
cut into your profits.
The real estate market
No matter when you buy, this will always be an important thing to consider. The real estate market is unpredictable,
which means any time you enter the market there are a lot of factors to consider. However, when you’re buying
an investment property, you really want to be sure you’re getting a good deal so your profit margins can be
higher. You’ll need to look at it as a longer-term investment and consider how it will affect you over a course of
years, not months.
Investment properties can be a great way to earn a secondary income while getting yourself onto the property
ladder. There are plenty of different property types you can find, each with their own set of pros and cons, but one
thing remains constant: owning an investment property is a commitment! It’s not something you can do on a whim,
which is why doing your research is the most important first step you can take. g
*The information above is for informational purposes only and should not be used as investment or financial advice.

28 | REAL ESTATE NOW | denise@BCislandhomes.ca