How to get rich with real estate

By Michael Dominguez

Critics will argue that $1 million isn’t the same value as it used to be, but it still has a very nice ring to it. You can be a millionaire. Visions of Scrooge McDuck and the guy with the top hat in the Monopoly game come to mind.

Also note that, according to the World Wealth Report 2014: “There are now approximately 320,000 high net-worth individuals in Canada — that’s people who have at least $1 million in financial assets, excluding their principal residence”.

But how can you be sure to get into that select company, invest in real estate and hold onto that asset?

I bet you’re thinking: it can’t be that simple. You would be right. Yes, you must select a property in an area that has the right fundamentals, you must deal with tenants and you must sacrifice a few weekends a year to deal with issues. But in the end, you WILL be a millionaire.

Let me run through some of the numbers for you. Somehow, some way, get $600,000 of real estate under your control. That could be one, two or even three properties, depending on the area of the country. Not just any property will do. Make sure the property can generate enough rental income to support the expenses and debt financing.

If you look back in Canadian real estate history, a good area has doubled in value every 15 years or so. But for this example, let’s say it takes 20 years for your well-positioned property to double in value.

Your $600,000 in assets is now worth $1.2 million. Meanwhile, your mortgage debt is almost paid off and is sitting around $200,000. That doesn’t even take into consideration $1 in total cash flow.

You, my friend, used real estate to become a millionaire. As of 2014, approximately one per cent of the Canadian population has a net worth of investable assets. Let’s say that number jumps to between three and five per cent by 2035. I’m sure you’d be okay being one of the top five per cent richest Canadians in 20 years.

The key component between winners and “also-rans” in the real estate world is that the winners take action and continue to take action. Take those weekend courses, do your research, build your power team, then TAKE ACTION.

Real estate is really not a get-rich-quick scheme, but it certainly is a get-rich-for-sure scheme.

Michael Dominguez is an investor and Realtor with RE/MAX Jazz Brokerage.

He was also the winner of Realtor of the Year at CREW’s Top Investor Awards 2014. Nominations are now open for the 2015 awards. For more information, visit http://topinvestor.ca/
 

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Investment Hot Spots:
Notre-Dame-des-Bois, Stirling-Rawdon, Saint-Lazare-de-Bellechasse, Broad Cove, Upper Lakeville

COMMENTS

  • by Sarah 2015-01-17 6:08:04 PM

    Great article and in the past has proven to be a sure thing. A possible small housing correction looming with the oil prices dropping may happen in FY15 but should not have much effect in the long term. My goal is to buy 1 property each year for 10 years. I am closing next week on #2. I hope to be there in 10 years or less.

  • by Robert Harrington 2015-01-19 5:01:40 PM

    Just a note for all you investors to improve your cash on cash position by looking hard at any real estate commissions, especially if you are buying without a buyers agent.
    First you are better off doing your own research and second if you are forced into buying a Realtor(tm) listed property make sure to delete the BUY SIDE or cooperating brokerage commission from your purchase.
    No the selling price will stay the same, the seller will still get the seller's bottom line price, the listing agent will get his/her listing commission, however that average ten thousand dollar "Sub Agent" or Cooperating Broker commission you can have adjusted out of your price, just as if your home inspector found several thousand dollars worth of repairs to do and the price you are paying for the property was adjusted down to allow for these repairs.
    In exactly the same manner you can adjust the commission ...and YES...don't believe the commission can't be changed...it's real estate.

    You can force disclosure of all commissions even if the selling agent is not your agent as every contract asks if you are satisfied with the published listing.
    Just say NO and demand to see all the published listings including the published listing that discloses the BUY SIDE commission and then just refuse to pay it.
    After all you are acting as your own buyer's agent and YOU are the only one with cash in the deal. Why throw away ten grand if you are truly a smart investor?

  • by 2015-01-21 4:56:17 AM

    First find the best real estate agents and then find which property has highest outcome value. You can also buy various bonds of share market.But buying bonds of share markets is very risky nowdays. So buying land and houses are good way to invest your money. Countries like the USA, England and many other european countries are favoured nation for investment.

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