QUOTE (Pabs @ Jun 23 2010, 10:53 AM) I`m planing on buying my first income property in Moncton (New Brunswick), where I`m currently located in. After looking at several duplex properties, my motivation has gone down because I haven`t found one that provides positive cashflow. I think one of the reasons why is the double tax you have to pay on this province when you have a “non owner occupied” property. Talking to a real estate agent, he also agreed that is almost impossible to obtain positive cashflow on a duplex, and if you get lucky you might find a deal where you break even. However, it seems to be that the more units a property has, the easier it is to find one with numbers that work. That`s why I`m thinking now on looking for a triplex or fourplex, but then I remember what experienced investors always say: “Think big, start small”.
Any suggestions?
What I`m seeing in the Toronto market is that competition is fierce and prices out of line for smaller properties up to about the million dollar mark. At that level the new inexperienced investors drop out and prices need to be justified for the price and cash flow. The bigger players are not interested in these properties either so that works out well. Commercial mixed properties can also be good. You have to learn to love the numbers.
Without cash flow over time you will find it very difficult to maintain and improve your building. An eviction or vacancy becomes a nightmare rather than just part of the business. I can`t tell you how many people have said to me I need this rented this month or I can`t pay the mortgage. Never let this be you. Desperation is probably the worst enemy of the landlord investor. It will make you accept bad tenants which will cost you even more and even scare your good tenants away.
Be patient...
