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Investment Properties 2 "You are a seasoned property investor and are constantly on a look out for the best property deals. Or you may be in the midst of embarking in your first ever investment property."
There are 7 critical considerations before embarking on the road of property investing.
1. Tenants from hell
This is your worst nightmare. As ‘tenants from hell’ can damage your property, delay their rent payments, refuse to leave and disputes can take months to resolve.
2. Painful mortgage repayments
What if after ‘persuading’ your ‘tenant from hell’ to leave there is a prolonged vacancy? You still have mortgage repayments to keep up with, so your investment property has now turned into a negative cash flow asset.
3. The roof is leaking… again
On-going maintenance cost, such as leaking roofs, burst pipes, etc. is going to add to the overall cost of owning your investment property.
4. Will it burst?
Predicting when the property bubble will burst is very bad for your health… very bad. The property market goes in cycles… as long as you have the holding power, you should be fine. A positive cash flow property helps though.
5. Putting all your eggs in one basket
Do you own all your investment properties in one country? You can hedge your properties in your own country by investing in properties overseas.
6. How much should I pay for it?
In positive cash flow properties, you can calculate the cash-on-cash rental yield. If the yield is comparable to the market then it’s a good price to put your money down.
7. Ain’t got time
Tenant management is a constant hassle when you have your personal life and career to juggle. Consider engaging a professional to help you manage your investment properties.
What if I can show you how to eliminate all these critical considerations?
One of the options that you would be able to pursue to eliminate all these critical considerations is to invest in a "shared investment property scheme" with minimal capital (affordable for most retail investors). The benefits of investing in a shared investment property scheme are...
#1 Blue chip tenants
Invest in commercial properties that have existing blue chip tenants such as multinational companies and national chains. You will have more stable tenants providing you with steady rental income.
#2 Long-term leases
Commercial leases are long leases of 5 - 20 years. This provides you with an assurance of long-term rental income. The risk of vacancies are low as commercial tenants have incentive to renew their leases before expiry to negotiate for lower lease rates.
#3 Triple-net leases
A triple-net lease is a lease in which the lessee (tenant) pays rent to the lessor (owner), as well as all taxes, insurance and maintenance expenses that arises from the use of the property. You will also find that your property will tend to be kept in a bettter condidtion by your tenants. There will be no additional and ad-hoc cost for you in maintaining the property. I can show you how to invest in these properties.
#4 Positive cash flow asset
The property market goes in cycle. Your 'holding power' is very important. What helps is that your property already generates a positive cash flow for you. I can show you how to invest in properties that assures you a return on investment the day you put your money down.
#5 Invest in a G7 country
Canada has one of the strongest banking system in the world and currently leads the G7 in GDP growth. Foreign investors are able to own freehold properties in Canada. If your property investments are concentrated in one country, maybe it's time to hedge your property investments by diversifying. This way, you have a balanced portfolio of property investments. If you country is in a 'down cycle', your investments in other countries balances it up.
#6 Yield of 6%pa-9%pa
Aim for cash-on-cash rental yields of 6%pa-9%pa as a reasonable target to put your money down. This is a highly achievable rate in Canada. But this is not the best part, in investment properties... there are capital growth. This means, you can enjoy a conservative returns each year while seeing your property appreciate in value. A total ROI (cash flow plus capital gains) of 15%pa within 2 - 5 years is achievable.
#7 Hassle free investment
A shared investment property scheme engages independent 3rd party property managers to manage your property. This gives you total peace of mind... to enable you to give your full attention to your family, career or business.