Friday, December 18, 2015

Self Due Diligence - Which Real Estate Is For You?

Industry professionals love to promote the fact that investing in income properties is a legitimate way to wealth creation. It can not only provide an income stream, but capital appreciation as property values grow over time. The types and categories can include – residential (both single & multi –family), commercial buildings/strip centers (retail & office), mixed use (commercial & residential), industrial buildings (production & warehouse types), and even land that generates income (agricultural & solar farm).

As you consider the various categories, you also need to assess the type that not only best fits your objectives but best SUITS YOU. Investment property markets are littered with acquisitions which have ‘gone bad’, often times because the investor did not do sufficient SELF DUE DILIGENCE.

Some key questions to consider include:
  • Am I more interested in residential or commercial/ industrial properties?
  • Locational / neighbourhood criteria?
  • Do you intend to be ‘hands on’, or will you require a property manager?
  • Can you accept cash flow/return declines in the operation of the property?
  • Are you in a position to re-capitalize a property if circumstances change?
  • What are the risk factors which you cannot accept?
  • How can you best limit any liability?
  • What are the market expectations? The read of the current market?
  • Is liquidity an issue if you need to sell quickly?
  • Type of financing required and initial cash (downpayment) capability?

Any investment comes with its share of risk and income properties are no different. Good preliminary planning - starts with an honest assessment of YOU, your objectives, capabilities, comfort zone and so on. Once that’s figured out, it’s time to move on to the market in a direction that fits best.

Always looking to network with investors and other professionals in the broker community. We’d welcome your comments and feedback. And as always, would be pleased to discuss the opportunities here in Windsor-Essex!

Mark Lalovich
Office: (519) 966-0444
Cell: (519) 259-5434

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