Episode Details

Hello fellow wealth hackers!!

How do you convince someone to invest in real estate?

This was a question I was asked while on a podcast which caught me off guard as I generally don’t try to convince anyone actively as I in I don’t tell someone to their face they should invest in real estate but maybe I should because that’s my exact advice to my family.

My cousin Christopher is about to turn 19 and he’s joining the Canadian Armed Forces. I couldn’t be more proud of him. Christopher is like a little brother to me and I’ve kept a close eye on him because we lost his father, my uncle too soon to stomach cancer just over ten years ago.

Christopher is a major gear head, he’s watched every episode of that popular TV show Top Gear five times each. His video game time is spent doing simulators of trains, planes, and automobiles. So naturally, he went to college to become a mechanic and in a few weeks, he will travel to Quebec for army basic training then Kingston for job training for 30 weeks.  Once he’s done training and is working, his salary is in the 60k range and he will get a full pension after 25 years of service. Not bad?

As a treat to Christopher, I allowed him to chauffeur my family and I around as part of his send off party in my new BMW.  He loves cars and driving fast but he said he can’t afford the payments. I agreed with him, he should never be paying so much for a car at his pay and how cars and houses are liabilities if they don’t make you income.

This is all beginner stuffs to all you listeners how if you’re going to buy a home to treat it like an investment: you’re buying for value, the property has value add opportunities whether it be renting out rooms or the basement or the garage or a parking space etc.... the location has amenities in demand, there is demand for both rental and resale. We covered all the basics and I told my cousin to rent and not buy his home but instead buy an investment property in Hamilton.  Why?

The armed forces has some wonderful subsidized housing and dining options. My cousin’s room and board and MEAL Plan is about $100 per week.  To me, that’s a no brainer for a single guy and because he could be transferred anywhere in Canada for work including poor investment towns, it make sense he invest where I can keep an eye on things, where he can adopt my real estate team to manage his property for him.  No need to reinvent the wheel.

That is my honest advice to my cousin in how I convince him to invest in real estate.

More generic advice for the starting investor is to invest within an hour drive of where you live. If your target area is too far, it makes management challenging and you are less likely to make that commute necessary to grow and manage your portfolio.  If you don’t invest where I invest, that’s totally cool, I have referrals for London, Kitchen/Waterloo/Cambridge, Barrie, in the East: Bowmanville, Oshawa, Peterborough, Lindsay, downtown Toronto with full service teams just like I have in Hamilton, Brantford, St. Catharines, and Niagara Region. 

This is your investment for your retirement or to fund your child’s education or a downpayment for their home. You don’t want to trust this process to just anyone, only settle for the best.

Speaking of the best, many of you have been asking for updates on our AirBnb property.  June was great as we grossed $4300 including HST but excluding cleaning fees as that expense is a pass through. Guests pay what we pay the cleaners so personally, I leave it out for this analysis.  We collected HST, AirBnb does not collect HST separately so it comes out of our revenues, and we pay HST on a bunch for cleaning, property management and all our operating expenses. We had lots of capital expenses and one party to clean up after so June was overall negative cash flow and we are ironing out the wrinkles with the property.  

In July we had a breaker fail.  The symptoms we