homeownership<\/a> and have saved upwards of $15,000 for a down payment. With a $350,000 RTO property, you\u2019ll use the tenant-buyer\u2019s savings to offset your 20% down payment and closing costs. Plus, you benefit from the bank\u2019s financing.<\/p>\nBuy-rent-hold<\/strong>
\nMonika, our rental specialist, says that to make this single-family detached property cash flow against a monthly mortgage payment of $1,300, you would need a monthly rent of $1,600. It would be advantageous to create legal suites and convert the property into a duplex, thereby increasing your rent potential to generate $302 in monthly cash flow. (Setting aside 20% toward fluctuations and 8% toward a credible property management service offers peace of mind.) A pro tip to deal with pesky tenants is to include vandalism insurance when purchasing home insurance.<\/p>\nFor more profitable buy-rent-hold investments, it\u2019s critical to think outside the box. This means buying in areas where demand for rentals is growing but no one is looking, and where the likelihood of finding undervalued properties is much higher. The main consideration here is that you are building long-term relationships with these properties and purchasing for a minimum term of five years.<\/p>\n
Student rentals<\/strong>
\nWhen most people think of investing in student rentals, they cringe \u2013 but not Gillian, who says that when done right, this strategy can create a sizeable monthly cash flow that can go toward building a considerable estate for your kids\u2019 future.<\/p>\nWhen investing in a $350,000 property as a student rental, aim to create as many bedrooms you can comfortably fit. A three-bedroom, single-family detached property has the potential to house six students, paving the way for six separate rental incomes. At a reasonable rent of $500 per student per month, your monthly income would total $3,000. After expenses, your student rental will cash-flow $540 monthly.<\/p>\n
Gillian suggests three must-haves to ensure a dependable income stream:<\/p>\n
\n- Hire a reliable property manager who specializes in student rentals.<\/li>\n
- Build a bulletproof lease and have it signed by at least two guarantors.<\/li>\n
- Ensure the lease includes a clause holding each student \u2018jointly and severally responsible\u2019 for damage, as well as a cleaning clause and a utilities cap. Nothing holds a student more accountable than the thought of having their beer money spent on repairing damages, cleaning or utilities.<\/li>\n<\/ul>\n
Looking at these three strategies, we see three distinct outcomes. For this particular property, if you automatically opted for a buy-hold-rent strategy, you would end up missing out on more than $3,500 a year in cash flow that could have been generated by RTO and more than $2,800 that could have come from a student rental.<\/p>\n
Of course, these are just suggestions. You have to choose the approach that is right for you and your family, the one that helps you achieve your personal and financial goals. But that choice should be based on a thorough and comprehensive analysis that takes into account the risks and rewards of multiple strategies.<\/p>\n
Mothers of Real Estate was founded by Monika Jazyk, Gillian Irving and Rachel Oliver as a community for anyone who wants to create sustainable, above-average cash flow. To learn about MORE and the group\u2019s intensive seven-week e-course, visit mothersofrealestate.com.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"The decision to become a real estate investor generally hinges upon three questions: How can I make positive cash flow every month? What is the right investment strategy for me? Where do I start? Before coming together to form Mothers of Real Estate, Monika Jazyk, Gillian Irving and I were investors grappling with these questions […]<\/p>\n","protected":false},"author":1,"featured_media":20649,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[10],"tags":[],"acf":[],"_links":{"self":[{"href":"https:\/\/www.canadianrealestatemagazine.ca\/wp-json\/wp\/v2\/posts\/7680"}],"collection":[{"href":"https:\/\/www.canadianrealestatemagazine.ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.canadianrealestatemagazine.ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.canadianrealestatemagazine.ca\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.canadianrealestatemagazine.ca\/wp-json\/wp\/v2\/comments?post=7680"}],"version-history":[{"count":3,"href":"https:\/\/www.canadianrealestatemagazine.ca\/wp-json\/wp\/v2\/posts\/7680\/revisions"}],"predecessor-version":[{"id":20918,"href":"https:\/\/www.canadianrealestatemagazine.ca\/wp-json\/wp\/v2\/posts\/7680\/revisions\/20918"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.canadianrealestatemagazine.ca\/wp-json\/wp\/v2\/media\/20649"}],"wp:attachment":[{"href":"https:\/\/www.canadianrealestatemagazine.ca\/wp-json\/wp\/v2\/media?parent=7680"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.canadianrealestatemagazine.ca\/wp-json\/wp\/v2\/categories?post=7680"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.canadianrealestatemagazine.ca\/wp-json\/wp\/v2\/tags?post=7680"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}