In the 12 years I have been writing this blog, the number one topic has most certainly been the idea of buying an investment property in our area and specifically, Blue Mountain. I often get 2 or 3 enquiries a week from people about this and what I have learned is that there is very little concise information online about this topic.
To be fair, it is very confusing and not at all as straight forward as buying a residential property. In my experience, the people who ask questions are most commonly hoping they can buy something, put a mortgage on it, have it fully managed and then still generate a positive cash flow. Let me be clear on this – it is NOT possible in most cases. If it were, I’d buy ten and retire! Just kidding on that last point.
Fully managed rentals, such as condos in the Village, have deductions of course for management, utilities, insurance, call centre fees, cleaning, etc. This will usually add up to expenses that will usually eat up more than 50% of the gross income. From the balance, there are still condo fees and realty taxes to pay all before you get to paying any of the mortgage payments. You can see, the math just doesn’t work.
I suggest that people really stop and ask themselves what the goal is. If they are looking for personal use and then rental income to offset the expenses, these units may be a very valid purchase but that is not an investment per se. If people are looking for a true investment for the purposes of wealth creation or long-term security of a property for retirement, then the better option is to look at residential properties with annual tenants. No utilities to pay, no cleaning costs, minimal management fees, lower insurance, etc.
Here are a number of previous blog posts on the topic. If you watch the video first and then read the 4 part series, you’ll know more than the average bear and it will help answer your questions.
Watch the video: Buying an Investment Condo at Blue Mountain
Buying An Investment Condo in Collingwood -Blue Mountain; 4 part series
If you are truly an investor looking at wealth creation, you need to understand the concept of leverage. While the numbers are SERIOUSLY out of date on this older blog post, the concepts are still valid and I suggest you give this a read: Investors: Here’s The Secret Key to Earning 18% or More On Income Property in Collingwood or Anywhere
If you are considering investment properties in our area, I’m here to help.