A commentary by Tami Bonnell, CEO, EXIT Realty Corp. International
Whether in your career or personal life, you know how satisfying it can be to find your lane and stick with it. Your “right lane” is a specialization or passion; something where you can use your expertise to help you succeed. It is an extension of your best self, it just fits and feels right. Investing in real estate is no different. When you find a lane in real estate investing based on a passion that rewards you both personally and professionally, you’re bound to succeed.
I travel across North America and witness people succeeding in real estate investment who have found their lane and stuck with it. Here are some examples.
A divorced woman and her ex-husband mediated to live within ten miles of each other so they would be able to co-parent well. Because she found that arrangement to be so beneficial for her own children, she developed a passion for helping other parents to do the same. She buys investment condos to rent in the town where she lives to help divorced parents stay close to each other, keep their children in the same school system and minimize disruption. Renting a condo is affordable for the parents who are now splitting their income and the investor profits to the tune of around $500 per month on each condo. Her tenants often stay for two to ten years and when new renters come in, freshening up the décor is all that’s needed. Renting to this niche is in her comfort zone; it’s a lane she knows.
In another example, a group of construction workers including electricians, plumbers and finishers, saw how the owners of the properties they worked on were building equity and in some cases, were flipping them for a profit. The workers now engage in an ongoing weekend project of buying homes, fixing them up and flipping them. The workers are still employed at their full-time jobs, but they feel less pressure, they’re building a nest egg and they’ve found their right lane.
I know of some single mother investors who conduct classes for other single mothers teaching them how to invest in real estate. They share best practices and their own experiences to help others succeed.
Many hospitals bring in doctors and nurses on short term contracts. I know of nurses who live close to the hospital where they work who buy property to use as short-term rentals appealing to this niche market.
People who love to travel are buying property to use as short-term rentals opportunities like those offered by Airbnb. They use the property themselves anywhere from one to six weeks per year and the rest of the time, they rent it out. Properties range anywhere from roof-top condos to waterfront to suburban neighborhood homes. These opportunities extend beyond vacationers to business travelers who would rather rent a house for the same money as they would have to pay for a hotel room (or sometimes less) and have the space to move around, cook for themselves and enjoy a local experience. The key is figuring out which kind of rental you would enjoy so you’re looking forward to your next renter rather than regretting your decision. As with any investment property, ensure that municipal guidelines permit your intended use for the property.
Millennials are starting to invest together. They’re watching the expansion of their college or university and noticing a shortage of dorm space, so they’re buying multi-family properties close to campus. Someone from the investment group may live in one of the units and they rent out the rest. When they start achieving a positive cash flow, they buy another property. They put up less money as part of a group than they would have to individually and enjoy the benefit of taking that first step on the property ladder.
A real estate agent in one of our EXIT Realty brokerages became widowed at age 50 after staying home to raise her children. There was no money in the bank, no life insurance and no provision for her future. She decided to become licensed to sell real estate and then began to invest. Now she holds monthly workshops teaching other widows how she started over and built her investment portfolio. Some of the widows in her group participate in investment groups and some are working towards buying their own home. Like the millennials, they invest together because they enjoy connecting with like-minded people and feel a sense of safety in numbers.
Find your passion first, then find a lane that fits. Using the services of a specialist investment real estate agent and also doing your own research are key. The Housing Market Stats section of crea.ca and sites like housepriceindex.ca can help. Google vacancy and inventory rates. When you’re ready to learn more, check out local investor groups. In a search of meetup.com, more than 60 real estate investor groups were found within five miles of Toronto. Search for the topic on LinkedIn and Facebook for more opportunities to connect with like-minded people. Remember to share your intentions with your friends, family and colleagues. They know you well and often an opportunity will present itself once you’ve set your plan in motion.
