I will be creating a number of articles over the next few weeks to help you in navigating the difficult channels of the real estate industry. The focus is on single condos, townhouses, and detached homes. There won’t be any information about multi-family properties, as the math is quite different.
Two Channel Real Estate Navigating
To steer you in the right direction, there will be two areas of focus. Historical information to compare the housing market and the stock market, and regional analysis to demonstrate the risks and rewards of investing in certain markets.
My name is Gil Donkersgoed. I am a writer, systems analyst, and real estate investor. I also am a sailor. The purpose of these articles, is to show you how to evaluate whether a property is a good purchase or not.
Navigating Real Estate – it’s All About the Math
To accomplish that, I will discuss formulae to help you determine the ability of a property to produce income. There are also formulae to determine the cash flow. They are very different calculations. Each is important to determine the property’s ability to profit. You’ll learn the difference between capital and current expenses, the benefits and drawbacks of depreciating your investment property and what those look like to Canada Revenue.
There will be some mortgage calculations. (Fun)
For those of you with a home office, you’ll learn how to use the space as a tax write-off.
As with any investment, there are no guarantees.
Navigating Real Estate- Chartered and Unchartered Waters
By chance, I built a property in Victoria 7 years ago. Lucky me. Real estate values in BC have improved significantly in the last few years. The common belief is that because of limitations in available land in BC, and the desirability of the climate and scenery, it will continue to increase. However, there have been lots of years where the real estate market has been flat. Conversely, if I had built a property in Fort Mac 20 years ago, I would have believed I had a licence to print money. Well, at least until around 2012. By the same token, if I had built a house in Fort Mac in 2012, I’d be hanging my head right now.
Within the next few weeks and months, I will share documents to give you the best mathematical information to help you determine the value and affordability of your real estate investments. These articles will also support you in calculating if a property is worth purchasing, and if you are doing the best you can with the investment you own.
Real estate investing isn’t always smooth sailing. In fact, falling overboard, dangerous seas, insufficient maintenance, and operator inattention are the four most common causes of fatalities. Three out of four causes are highly preventable, as they are with real estate. Although adventure is part of sailing, (and makes for some great story telling) no one wants a ship wreck. Good sailors and smart investors share common characteristics; calmness, an understanding of the fundamentals, preparation and intuition (which heightens with experience).
I look forward to providing you with the information to support you in making calm, logical decisions while navigating the difficult channels of the real estate industry.
Happy sailing! I’d love to hear from you.
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