It was a British Baron, ​​Lord Harold Samuel, owner of one of the largest property companies at the time, who said the often quoted: 

“There are three things that matter in property: location, location, location.”

But is that one of the golden rules for real estate investing?

Before you look at following the golden rules you want to first get clear on your investing goals. Do you want to:

  • Feel more secure in your retirement?
  • Have experiences and travel more? 
  • Spend quality time with loved ones? 
  • Take care of ageing parents? 
  • Set your children on the path to independence through further education?
  • Look to contribute to causes you care about?

With your goals clarified, what are the 3 golden rules you need to also consider? 

  1. Location – yes back to Lord Samuel, location is key. Sometimes you will see a run-down house sell for a large amount of money and wonder Whaaaaat? But it is very likely that it’s in the right location and someone has seen or knows the opportunity it presents. 

Two key elements of location that you want to be looking at are appreciation and rent. Will the property appreciate well over time? It is important to look at the comparables not only from what has sold recently but also historically in the area. 

The other statistic to check out is can you command a high rent for the investment property?  It is also important to understand what is allowed in terms of rent increases, not all areas and certain provinces are the same. 

Lastly, as some of you know, I look at not only the property on the location but the land itself.  Developments to bring the location to its best and highest use is also a strong strategy that can be employed.  I’ll be sharing in the coming months a case study webinar on a current development project and how I selected the lot.

  1. Right Property – does the property you are looking at have the opportunity to add and force value?  A good example is a house where you can add a secondary suite, which many municipalities are encouraging now to help with housing shortages and lack of rental inventory. 

However, be careful, if a property you are looking at already has a secondary suite be sure it is legal. Calgary Council extended the amnesty for illegal secondary suites to be registered with the city to December 2021, but after that, you could find yourself not able to rent out. The City is extending the Secondary Suites Amnesty program until December 31, 2023. https://www.calgary.ca/pda/pd/home-building-and-renovations/secondary-suites.html

  1. Invest Based on the Numbers, Not Emotions – all too often where money is involved, especially our own, we end up allowing emotions to dictate our decisions. Think about how many times that impulse purchase, ‘cannot fail deal’ or ‘Offer is going away’ has resulted in us regretting our buying decision. 

Always look at the numbers, take the time to understand them and have them explained clearly so that you know what you are investing in. Ask questions. Evaluate the deal. Leave the emotions to that impulse dress or tech toy purchase. 

My background in running financial models, evaluating the economics of large projects has allowed me to evaluate real estate investments but you don’t necessarily need that experience.  There is free software for people like DealCheck so you can proceed with a buy and hold or a flip project with more confidence.

Yes, I follow these 3 golden rules when I approach any potential investment.

Many people including professionals, employees and the self-employed have discovered that the best way to enjoy time and lifestyle freedom is through real estate investing. It can be the foundation for not only long-term wealth but also a source of consistent income for today.  Owning real estate does not necessarily require the time and dedication that you might think.

The good news is that it is possible for anyone, including you.

With the right approach, real estate investing can help you successfully reach your financial and life goals faster and easier, without the hassle. It’s also a great way to diversify your investments and create generational wealth.

If you would like to understand more about real estate investing be sure to keep reading our emails and watch for notices about upcoming webinars.