Do you ever worry about how you’re going to support yourself once you retire? Or how you’re going to afford post-secondary education for your children?
Financial instability is a huge cause of stress and worry for Canadians, but Peggy Hill of RE/MAX Hallmark Peggy Hill Group Realty in Barrie says buying investment properties is a great option that can help you stabilize your finances and give you future financial freedom.
What are investment properties and why you may want to invest
An investment property is a property that’s not your primary residence that can provide steady rental income. While Hill and her team offer complete real estate services, Hill says helping clients purchase investment properties has become a bigger part of her business as more people have become interested in it.
“This is how I built my own wealth in real estate. And this is why I am so passionate about it. I want to help people understand the ins and outs of it and how it can benefit them.”
Hill says the need for rental housing is at an all-time high in Barrie and won’t be slowing down any time soon. “When we have a property for rent we have ten times more people wanting it than we have properties available,” explains Hill. “There is not enough supply for the demand.”
This is why having a rental property is a great investment. Hill advises that a good place to start is to buy a single-family home or townhouse, or something with a legal basement apartment. She says there are many areas in Ontario with rental properties for sale that have the potential for immediate cash flow.
“It’s important to work with a professional who knows the market and will find you a place with cash flow. It’s not about finding cheaper places because you can find cheap properties in a lot of places. But if the rental market is not great it doesn’t matter what you paid for it, you’re going to struggle.”
Why you need a solid financial plan in place for your future
Like many in Ontario, Hill was born to immigrant parents who were focussed on making a living, not saving for their retirement. They currently live with her, receiving their Canada Pension Plan (CPP) retirement pension, and while Hill is happy to take care of them, she wanted to ensure she herself had more financial stability.
“Being self-employed, I knew that there was going to be a time when I wanted to retire and it would be difficult to live off CPP,” says Hill. “And, if you don’t pay into other pension funds or investments your money is limited at the end of the day.”
Hill began selling real estate 17 years ago and was eager to build her own portfolio. Eventually, she bought her first rental property by taking a line of credit out on her home. With the equity, she borrowed against that and she bought her first rental property with 20 per cent down, which is the standard percentage needed.
Some feel that doing this is too risky, however, Hill has a different perspective. “There are always risks, but historically speaking real estate has never been a risk unless you are forced to sell at a bad time. So, when you are buying real estate it can be important to buy and hold.”
Over the past five years, Hill has continued to invest in the rental market with success – an experience she’s happy to share with her clients.
While it sounds simple, Hill can’t stress enough that it’s a lot of hard work. However, with the proper guidance from the right professionals, it’s doable. “Is it work, yes, I’m not going to lie. But if you’re going to look out for yourself and be able to retire comfortably, this is a great option.”
For information on building your own real estate portfolio, contact the team at RE/MAX Hallmark Peggy Hill Group Realty, or call 705-739-4455 and book an appointment today.