1. Poor Property Selection - This one can weigh on anyone's soul as purchasing the wrong investment property can have long lasting repercussions that can range from high vacancy rates to exorbitant maintenance/repair costs. You need to ensure that you educate yourself and do your homework before you jump into any investment. Start by learning the criteria that make for a good income property investment.
2. Lazy Expense Tracking - Income property investing is a business, and as such, you need to be doing one of two things. Increasing revenue or decreasing expenses. Failure to track expenses is a costly mistake as patterns may reveal opportunities for cost savings. One such example is utilities which are one of the biggest expenses in operating an investment property. Often times water leaks can go undetected and cost BIG money. Simply tracking your bills will alert you to any activity that is out of the norm and allow you to act immediately.
Canadians celebrated the two-year anniversary of rock bottom interest rates this week.
But as a retirement planner, my fear is that they celebrated by taking on more debt rather than using such an auspicious occasion to pay it off. There is some flawed logic out there that since rates are low, debt repayment need not be a priority.
Quite to the contrary, if you`re the average Canadian with 1.67 children, an IQ of 99 and $112,329 of mortgage and other household debt, today`s rates are nearly irrelevant to you.
Realistically, very little debt is going to be paid off for most borrowers during what remains of the current low rate environment, however long that ends up to be. Most Canadian debt will be paid off many years into the future at future rates.
The level of interest in Canadian income producing properties has never been higher. International investors are looking at Canadian real estate as a safe haven.
REITs are continually on the hunt to acquire more properties for their ever expanding portfolios. Investors who have pulled their money from the poorly performing stock market and those not content with low interest investment vehicles are looking to move their money into real estate. Even with the market cap compression taking place, real estate is still one of the few bright lights and as a result competition is intense for a very limited supply.