d. Invest in real estate
The biggest obstacle to real estate is that requires a lot of capital in advance to get started and as stocks requires a little luck with timing. Thus, if you live paycheck to paycheck, investing in real estate may be out of reach.
I was lucky and had an advantage. My parents put me through university and so I had no debt to pay. After working for about five years, I was also able to save and buy on the market at a time when the Calgary real estate market was not yet inflated.
At that time, the oil and gas industry only grew and I bought at the right time, just before the housing market moved up. A few months later, I arrived a lot at a renovated townhouse. An extension is something that has not been developed and built yet. The builder sells you at the market price at that time and you are only required to deposit a minimum lump sum to lock in the price.
For my investment, it was about $ 5,000 that I had to put down at the time and then another lump sum 6 months down the road. You then wait until the townhouse is built. During this time, it is your opportunity to get your finances in order so that in a few years you will have money to close your purchase. As such, I was able to lock in a deal.
When it was ready to close, Calgary's economy was hot. I was able to sell my first apartment and made a decent payment to reduce my second purchase.
A few years later, I began to notice and feel that the Calgary economy is declining. At that time, I also wanted to quit my job and take some time indefinitely to travel and explore other alternatives to get an income out of the office.
When I thought about where I was and other factors at the time, I trusted my intuition to sell the place. Again, I was super lucky. It was a seller's market then and I could catch the property wave at its highest rock in Calgary before it started to go back. A few years later I wanted to invest again in the real estate market. I knew Calgary was not the place to do it and was looking for another city. I saw the potential in Toronto so reinvested back into real estate because it made sense to me.
If you have a one-time savings and can invest in real estate, I think it's a great way to hedge against inflation and trade over time. But before you jump into real estate investmenta clear on:
- Why do you want to invest?
- What are you going to do with your property purchase? Will you rent it out? Will you live in it? Will you stay in it and also rent out a room?
Be on top of trends and be aware of what's happening in the economy. Do a cost / benefit analysis.
- Is it worth putting down a huge lump sum and keeping it under & # 39; x & # 39; yearly ?, or;
- Will you be better off living somewhere where rent is cheap and diversify your portfolio?
Be sure to calculate the property's potential for return on investment for all investments. The property must be income generating. This can be found by dividing the property's net costs with its purchases.