How to Use Real Estate Investing to Retire into Your Dream Life

By
Amy Leong

June 28, 2020

Investing in Real Estate is one of the easiest ways to ensure an easy retirement. In this article, we showcase how this is possible.

Introduction

Real Estate is one of the most timeless methods of investing in the world. There is a famous quote by Andrew Carnegie that reads “Ninety percent of all millionaires become so through owning real estate. More money has been made in real estate than in all industrial investments combined. The wise young man or wage earner of today invests his money in real estate.”

And for good reason: real estate is a physical commodity that is limited in quantity, and a non-negotiable must-have for people around the world. Everyone needs a home to live in, and businesses require real estate space in order to operate their businesses. Because of these points, there will always be a demand for real estate.

In addition, there are a number of ways one can turn profit when investing within real estate. For example, some investors may find profits by purchasing homes and renovating them (flipping homes), whilst others purchase pre-sales and sell the contract for a higher price at a profit.

Cashflow

Most notably however is the ability to generate what we call consistent “cashflow”. Cashflow is the bread and butter for building long term, sustainable passive income through real estate. By purchasing multiple properties, one can not only pay off the mortgage by renting the property out to other people, but the interest on the property over till will begin to accumulate over time. The Vancouver real estate market has proven time and time again to be an incredible long-term investment from an appreciation standpoint alone.

Real estate is also a fantastic long-term investment strategy, as you are able to leverage the market. What this means is, investors are able to secure mortgages in order to gain access to the property without paying for the full value up-front. Because interest rates are at an all-time low right now too, it makes real estate investing even more lucrative.

It is always crucial to understand the risk involved in speculating with any sort of investment. However, with the right amount of planning and strategic analysis of personal finances, one can build an incredibly impressive portfolio by leveraging mortgages on properties whilst also renting the properties out.

Airbnb

Another incredible strategy that we wanted to share with you is investing in properties that are eligible to be rented out on Airbnb. In Downtown Vancouver, only a number of buildings are eligible to be designated as Airbnb space. The City of Vancouver has certain regulations surrounding this topic. However, because only a few buildings are permitted, the laws of supply and demand ultimately increase the prices of these units drastically on the app. This allows savvy investors to turn huge profits yearly. We always recommend individuals that are looking at getting into Airbnb also have an Airbnb property manager that will tend to your unit(s).

Real Estate Investing as a Retirement Strategy

When it comes to retirement, individuals in Canada have a few options. Many people that fail to plan ahead will rely on the Canadian Pension Plan. Other people may receive pension plan payouts from their place of employment. However, the most savvy of individuals will have an additional game plan to put their money to work. By budgeting well in advance each month, our clients have been able to reach their down-payment targets that we helped them formulate.

First Time Homebuyers

There also are a number of other benefits available in Canada such as the First Time Homebuyers Incentive. The program offers 5 or 10% of the home’s purchase price to put toward a down payment. This addition to your down payment lowers your mortgage carrying costs, making homeownership more affordable. This is fantastic news for folks that are looking to enter into the market with their first purchase, and the financial burden is reduced considerably.

Entering into the Vancouver real estate market may seem a bit challenging for first time homebuyers. However, with the right planning, financial strategy, and real estate professionals by your side, getting in early will certainly be possible. Most people have trouble finding properties that are true winners: the best deals with the best bang for your buck. Our team at Amy & Ally at Engel & Völkers Vancouver has sold over $350m in real estate within the lower mainland since 2018. We have exclusive access to all of Greater Vancouver’s top real estate property listings. In addition, our mission is to share our knowledge of real estate investing with people like yourself, and help build long-term “cashflow” wealth streams that will help you create the life of your dreams.

Summary

Investing in real estate in Vancouver is one of the best long-term strategies for building incredible, tangible wealth. Over the last thirty years, Vancouver has seen tremendous appreciation with property value, with many homes tripling in price or more. Additionally, because rent supply is low, rent prices are high enough to cover entire mortgage payments. Once the mortgage is paid off, monthly rent will accumulate as straight cash payouts.

If you have yet to purchase your first home, our team at Amy & Ally are here to assist you in making the process significantly more manageable. From finding the best cashflow properties and deals, to educating on why certain properties are worth the investment, we’d love to get in touch with you and chat about how to get the ball rolling.

It’s never too early to start preparing to build your portfolio!