First Rental Property

Hello Friend,

Do you know how to select a good area in which to buy investment real estate?

Have you ever tried researching a particular area of a town that you were interested in buying real estate in?

These are questions that you should be pondering if you are a new real estate investor, and you are looking to purchase your first rental property.

In my opinion, the best way to gain insight into a particular area that you are interested in investing in is to simply walk around in this area.

By ‘walking the streets’ you learn the most that you possibly can about that given area.

You are able to observe many things.  The key things that you may see during your ‘walk-about’ of the area are:

• 1) Homes for sale
• 2) The condition of homes
• 3) Tenant profile (good or bad)
• 4) Close by amenities (shopping malls, Doctor’s offices, restaurants)
• 5) The general age of the people living in the area
• 6) The types of cars they have in their driveways

Walking the streets is the number one thing that you can do in order to get a true ‘feel’ for a particular area.

So if you are a new real estate investor and you are considering investing in a particular area.  If you have not done so already, take the time to walk the streets.  You will be truly amazed at what you will find.

At the bottom of this article, I have included a video that I recorded back in 2009.  In the video, I was ‘walking the streets’ and I share some of the insights that I found.

Check out the video below.

Best Regards,

Neil Uttamsingh

ps: First Rental Property will be making a HUGE announcement within the next few days.  Check back into the blog on a regular basis for the GROUND BREAKING news…

Now here is the video…

[youtube]http://www.youtube.com/watch?v=id2-2oajXq8&feature=g-upl[/youtube]

Hi Everyone,

I hope you are doing well.

Resourcefulness is an important skill to have if you are considering buying your first rental property.

If you take a look at the general population, there is a very small percentage of people who own investment real estate.  Due to the fact that there are very few people that own investment real estate, very often, it is difficult to obtain information on the topic of real estate investing.  Especially when it comes down to finding out information on the legal side of things.

For example…

…If a tenant decides to not pay rent on the day that it is due….what do you do?  If you are a new real estate investor and you are dealing with this particular situation, you may have no idea what to do, or who to go to, to ask for help.

Fortunately in most places, there is a set of rules in which Landlords and Tenants need to abide by.  Where I am from (Ontario, Canada) this set of rules is called the, Residential Tenancies Act, 2006

The reality for most real estate investors is that when you first start out and when you first buy a rental property, you have no knowledge of the Landlord and Tenant rules. You will have no knowledge of the rules because you will have no need to at this point in time..

There are lots of blogs that tell you that you need to understand the Residential Tenancies Act relevant for the area that you live in.  In theory this is true.  However, in reality, 99% of new real estate investors do not do this… They do not do this (take time to understand the Landlord and Tenant rules) because at the beginning, nothing may be going wrong with your rental property and with your tenant.

The Moment Things Change…

The moment that things change for real estate investors is the second something starts to go wrong with you rental property, or with your tenant.

When this occurs, the Residential Tenancies Act for the city that you live in becomes extremely valuable to you.  It becomes valuable to you because it is the ‘rule book’ of the do’s and dont’s of Landlords and Tenants.  When things are going wrong with your rental property, you as an investor have to follow all of the rules in order to ensure that you are doing everything by the book, and that you are not ‘breaking the law’.

For example, if a tenant decides not to pay rent, there are many uneducated landlords out there that think they can take this matter into their own hands and ‘ask the tenant to leave’.  Unfortunately in many cities, it is not this easy.  In situations like this, there is a long, drawn out process that you need to follow step by step in order to collect the rent that is owned to you…

There is a reason why there is a rule book in place.  It is there to ensure that people behave themselves and don’t take extreme measures when trying to rectify a problem.

Best Regards,

Neil Uttamsingh

ps: First Rental Property will be making a HUGE announcement later on this month.  Stay tuned!

I live in Toronto, Ontario, Canada.

Christmas time in Toronto is one of the most exciting times of the year. It is a really exciting time because; people are generally so happy and thoughtful.

People that live in Toronto; have come to live here from all over the world. People here have different cultural and religious beliefs as well as differing values. Despite this Christmas time seems to be an occasion where people put aside their differences, and act harmoniously towards one another.

The tradition of Christmas would not be complete without a wish list to Santa. So here it is. The top 5 things we should ask Santa for.

1) Health

Your family and friends are the most important people in your life. We all should wish for good Health for our loved ones, because without good health, other goals become hard to achieve. Ask for good health from Santa for your family and friends.

2) Happiness

I find negative people hilarious. Seriously. I cannot stand negative people. I think this is because I am such a positive person (thanks to the teachings of my family). Being a negative person will suck the energy right out of you. Negativity does no good for you. This mindset keeps you always thinking that the glass is half empty. Negative people tend to hang out with one another. If you are negative, and you know this, make the change and become a positive person. This is easy to do. You simply just have to start hanging out with positive people. The positive nature of these people will rub off on you, and in no time you too will become a positive person. Positive people are generally happy people. Whether you are a negative person or a positive person, put on your wish list for Santa continued ‘happiness’. As a happy person, you will always look on the bright side of things. Your world will completely change, and you will see the goodness everywhere.

3) World Peace

For many of you reading this, I don’t need to tell you how much conflict exists. In our world we have ongoing wars, with so many casualties occurring on a daily basis. In the end, what are we gaining from this unrest? I look forward to the day where there is peace on earth. Who knows when this day will come? However, each and every one of us can start small and do our own part. Promote peace and harmony. Avoid confrontations and conflict. If we all do our small part, that is all it takes. Santa, please give us world peace.

4) No more Poverty

This wish goes hand in hand with the wish for World Peace. When will the day come when we live in a world where there is no more poverty? Again, I believe there is a simple solution to this. The solution can be found in examining the 80/20 principle. The followers of the 80/20 principle believe that 80% of the world’s money and wealth exists with only 20% of the world’s population. If this is the case, then we need to ensure that there is an equal distribution of money and wealth throughout the world. We cannot have such large imbalances. Those with more wealth can make a difference to those less fortunate by donating money to a worthwhile charity. Ideally, these charities should be focused on helping the world’s poor and less fortunate. Santa, please eradicate all poverty in the world.

5) A robust real estate portfolio

This list would not be complete, without this final wish. Pay close attention to where this wish ranks on the list. I put this wish at the bottom of the list for a reason, because it is the least important wish. In life we have to have perspective. Material things, such as rental properties are not important if we look at the big picture. The things that are very much important are our family and friends and their health. Our individual happiness, and the happiness of others around us is important. A peaceful world, void of all conflict, fighting and killing is important. Finally, a world with no pain, suffering and poverty is important. Having all of these things would make the world a great place.

This is noteworthy as many people tend to chase material things, with no real sense of why they are doing it. Materialism becomes to them the most important thing in life. This tends to be a cultural phenomenon as material things are perceived to be more important in certain countries. Over the years, I have noticed that many people living in North America are very fixated on materials objects. I have seen this to the point where in some communities in certain cities, neighbours living on the same street are competing with one another, as to who has the nicest house, and the nicest cars parked in their driveway. On the flip side, in many other countries, materials things are not important, and people have no desire to acquire too many material objects.

Having said all of this, it is still good to have goals. Especially when it comes to investment real estate. Investment real estate, namely rental properties, can generate cash flow and wealth for an investor. A very noble thing to do would be to donate some of that cash flow and wealth generated by your rental property to those that are less fortunate. I know of senior real estate investors who have donated in the hundreds of thousands of dollars to charities that help out less fortunate people. This is very impressive human behaviour, and behaviour that we should all adopt.

In the meantime, ask Santa for the tools and knowledge necessary so that you can buy investment real estate, so that eventually one day, you can give back and donate some of this wealth to the less fortunate, if you don’t do this already.

[youtube]http://www.youtube.com/watch?v=ian6NyXpszw&feature=related[/youtube]

If you are a novice investor, one of the questions that probably is going through your mind is:

“If I buy a rental property, how do I know that I am buying it in a good location?”

If this question is going through your head, this is a good thing.

With investment real estate, there are many great areas to buy a rental property and then there are also very bad areas that you could buy a rental property.

The key thing to know is how to identify which are the good areas, and which are the bad areas.

By spending a little extra time and doing your homework, you can ensure that you are buying a piece of investment real estate in a solid area.

There are many factors to consider when buying. I have highlighted some significant factors that you must take into consideration before you purchase your first rental property.

For starters, you must ask yourself if there are any transportation improvements that are occurring in the city or town that you are looking to invest in. Transportation improvements can consist of things such as a new train station, a new subway station, new highways, or new airports. The construction of new transportation channels in a region is always a positive sign that the local economy will do well in the long run. When the local economy does well, so too will the short to long term appreciation rates of real estate.

If you are noticing transportation improvement in a region, this is a good sign. Begin to study the region further.

Another sign that you potentially are buying a rental property in a good area, is if the area is experiencing population growth. Not only should the area be experiencing population growth, rather the population growth of this area should be outpacing other adjacent areas. If this is the case, we know that there is a demand here. People want to be moving into this area. It is a desirable place to live. People will not want to move into an area that is undesirable. As such, there must be something special about this area. Continue to research it as a potential area to buy a rental property.

A third factor that you should consider when selecting your geographical area is the average income of the people living there. Most importantly, you need to know if the average income of the population is increasing. It is important that you know this information, as people with increasing incomes will generally have more disposable income. Not only will they have disposable income, in addition, homeownership for them potentially is easier due to their above average earning power. It is important to note that not all of these above average income earners will be homeowners. Many of them may very well be renters. As such, if you own a rental property in an area, where people are making above average income, you will be able to market your rental property to an audience of tenants who you know can afford living in your rental property.

Another important factor to examine when you are looking to buy a rental property in a particular area, is to observe and determine if the property is located in a transitional area. Transitional areas are often areas that are a bit rough around the edges, however, they are also areas that are experiencing significant long term change. It is through this change that long term real estate values can be affected positively, and in an upward trend. Not all transitional areas are created equal however. Some transitional areas many be at the very beginning stages of the change, whereas other transitional areas might be much further along the way with respect to all of the changes occurring. As long as you have identified a solid transitional area, with potential upside, this area could serve well as an area to purchase your first rental property.

Another factor, that is very important, that a lot of novice real estate investors forget to consider, is the political leadership of the given area. Whenever you are looking to purchase an investment property in a particular town or city, you must always ask yourself, ‘How is the political leadership in this community?’

This is a tremendously important factor to consider, as strong, forward thinking political leadership can help to increase the value of real estate prices in the long run. A city or town that is very innovative, entrepreneurial, and flexible will attract good things to that particular area. Big companies want to open offices in areas where there is good political leadership. Businesses want to operate in these areas, where they know that business, opportunity, and an entrepreneurial mindset is being rewarded.
Big companies do not want to open up offices in places that are experiencing slow growth, or negative growth. These companies do not want to operate or be associated with policy makers that are not going to work along side with them.
Strong and supportive political leadership in a region has a great effect. These are the areas that you want to be investing in.

If you are considering buying a rental property, and you know the area, but are unsure about the political leadership, call the town or city council and ask to talk to the mayor. Forward thinking, innovative mayors will want to speak with potential investors. They want to talk to you because they want you to invest in their city or town. They want their local economy to do well, and it will do well, if real estate investors like you, inject money into their local economy by buying rental properties.

If the mayor of the city or town is too busy to talk to each potential real estate investor, someone in the mayor’s office will probably put you in touch with the Economic Development Office. This is the office in the city or town, that knows everything, or should know everything about the local economy, the current policies, and the future plans of the region. If you speak to energetic staff at this office that are really passionate about their region, this is a good sign. Note this region down as a good place to potentially invest.

Ideally, you want to see present all of the factors listed above in a particular region before you buy a rental property. There are many areas that have these characteristics, as such are great places to invest. On the flip side, there are many areas that do not have any of these characteristics at all and are consequently terrible places to invest.

No matter what area you chose to buy your first rental property, make sure you do your homework, and exercise the necessary due diligence.