Real estate prices are falling, looking to become a landlord?

The Globe and Mail published today an article on risks, rewards and headaches in a down market.

With housing prices softening, it is fair to ask: is now the time to invest in real estate? 

While real estate can build wealth, today’s market is tougher than it looks. Rising interest rates mean higher financing costs, and many investors are finding themselves with negative cash flow. 

Add to that the time investment - YOUR time investment; handling repairs, tenant issues, and unexpected emergencies, and the picture becomes clearer: this is a long-term commitment, not a quick win.

If you’re considering this path, here’s my advice:

• Don’t stretch your finances. A higher down payment and a financial buffer are essential.

• Understand the tax implications. Rental income is taxed as regular income, and capital gains on non-primary residences can eat into your returns.

• Value your time. The hours spent managing a property are often overlooked, but can be significant.

Unless you’re prepared to hold onto a property for 10, 20, or even 30 years, real estate may not be the right fit.

Landlording isn’t for everyone, but with the right preparation, and with the right expectations, it can be a rewarding journey.

It was a pleasure to contribute to Alison MacAlpine latest article in The Globe and Mail. 

Link to the article: Want to be a landlord? Breaking down the risks, rewards and headaches in a down market