2018 is now in full swing with 4 events in the books! We had 2 property tours, our monthly QUICK START training and also a very informative presentation from www.naborly.com on tenant screening. Naborly goes beyond a traditional credit report and checks an applicant’s online presence with a much more comprehensive analysis enabling landlords to have more information to make their leasing decisions. A typical credit report is about $25 per report, Naborly is now providing their entire screening process and each report for free (which is amazing value!). Feel free to use our code “VENTUREFREE” to get on their system, or if you wait, it should be implemented soon on their site.
Now onto a question that comes up a lot for new investors, is investing in real estate really worth it? After all, we can have floods, leaky basements, bad tenants, constant repairs, interest rate uncertainty, market fluctuation… We could go on and on. Any one of these alone causes a lot of would be investors to avoid anything to do with real estate and deem it “too risky” or not worth the hassle. Feel free to check out our previous blog post “Does Real Estate Investment Need to be Risky?” as we dive into the actual risk associated with real estate investing (and how it is mitigated).
We always tell new investors that what defines good investors is usually how they deal with the unexpected things that may happen with being a property owner. Real Estate investment is not a simple process of getting a property – Renting it out – and simply collecting your monthly rents, while you are enjoying a drink by the pool. Many new investors have feelings of rainbows and butterfly’s when they hear annual returns of 20%+ and upwards of 40%. But that same investor may put their property up for sale the minute they have a flood, an unexpected vacancy, or if something does not go as planned.
As investors ourselves, we have experienced everything we mentioned above (and more!!). When they first happened to us years ago, the fears on investing came to the surface and its not a pleasant thing to go through. However, the main thing is that if we sold (even at a profit), we would be walking away from building our long-term wealth. Even if the market had not appreciated as it has in the past decade it is typically worth it to go through the hurdles that may come up, even if they may be thousands of dollars and a good amount of stress. We once had a flood happen in one of our homes that cost over $15K to repair, and it was not covered by insurance (the tree roots in the front yard, smashed through the piping). $15K is more than the cash flow in over a year! However, when you look at the all the financials, it usually makes sense to work through the issue. After all, Is a week or so of stress worth it to retire without needing to stress over money in the years to come? For the example above, we could have sold the property to make perhaps $100k (which likely would have gone into the bank losing value over time). We would also be walking away from a property that cash flowed over $1K per month, and has easily doubled the $100K just by holding it several years longer. We know these are the things that sound scary to some, but with real estate, you can outsource as much or as little as you like. That is where it is great to have a community of investors to call upon or a network to be able to help through when these things happen.
The best way to deal with unexpected things that happen with real estate is #1)Education, and #2) having the right team in place. Education is likely your best defense against fear when starting out with investing, and also when facing challenges. We did not know nearly as much when we started out as we do today, but when things happen you get educated quite quickly, and we can tell you from experience, it typically seems worst right when it happens rather than after you have spoken to someone and understand the problem better. If you just put a for-sale sign on the lawn (which we know many do), you could potentially be throwing away your financial future. The other thing we try to stress when starting out, or even when experienced, is to make sure the team you have (ie: realtors, mentors, accounts, lawyers, property managers, mortgage brokers, contractors, etc.) all have experience with real estate investment. This is a big one! Not all accountants know the entire income tax act, and not all lawyers know all aspects of the law. It is very easy to rely on your friend/cousin/uncle/etc. to help you out, but make sure they know real estate investment, as it is very different than just buying real estate.
The last thing we will leave off with you is that you don’t need to go through any of this alone. This goes from swinging a hammer to having someone you can call when things come up. Being part of a community, Meetup or organization that can guide you through your journey (especially when challenges face you) could be instrumental on your success. When we started out investing there was very little in terms of a support network, today there are countless meetups and organizations that can help you on real estate investing journey. You also have the option to treat Real Estate Like a stock or Mutual Fund if you wish, and not get involved with management of the asset. This is typically done through a Joint Venture or other Passive investments in Real Estate. Visit our Passive Investing section on our site to learn more or drop us a note. Our typical annual returns on passive investments yield 15%, upwards of 25%+.
Yes, in our opinion, going through the unexpected challenges is clearly worth it, and we didn’t even touch on the fact that it gets much easier the more experience you have.
Visit us at www.VenturePropertyInvestments.com and our pages on facebook or LinkedIn to learn more about how we can help you invest in real estate to profit in both an increasing or decreasing housing market. Or contact us if you would like to learn how we are providing double digit returns for our partner’s and clients year over year.
Until Next Time,
Build Wealth. Live Life
If you haven’t come out to one of our events, feel free to visit our events page on our site at http://venturepropertyinvestments.com/events/. If you are just starting out, or a seasoned pro, come out to Learn and Network with others like you.
Martin Kuev & Chris Shebib are full time Real Estate Investors, Realtors and Wealth Coaches who have over 20 year’ experience in Real Estate. With multi-million-dollar real estate portfolios and a team built over the past decade, they left the corporate world to have the flexibility to spend time with family, continue their own real estate investments and help others build long-term wealth.
Both Chris & Martin are first and foremost Husbands, and Fathers. Both are actively involved with their families and each have 3 daughters keeping home life full of surprises.