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Investment Properties: Tips for First-Time Investors
Investing in real estate can be a lucrative way to build wealth, and Saskatoon, with its growing economy and vibrant community, offers excellent opportunities for first-time investors. Whether you’re considering buying a rental property, flipping a house, or purchasing a commercial property, it’s essential to approach real estate investment with careful planning and informed decision-making. Here are some key tips to help first-time investors navigate the Saskatoon real estate market successfully.
1. Understand the Local Market
Before making any investment, it’s crucial to understand the local real estate market. Saskatoon has unique market trends, neighborhood dynamics, and economic factors that can influence property values and rental rates. Start by researching:
- Neighborhood Profiles: Different neighborhoods in Saskatoon have varying levels of demand, property values, and rental yields. Popular areas such as Nutana, Riversdale, and Stonebridge offer diverse investment opportunities.
- Market Trends: Keep an eye on market trends such as property appreciation rates, rental demand, and vacancy rates. This information can help you identify which areas are poised for growth.
- Economic Indicators: Saskatoon’s economy, driven by sectors like agriculture, mining, and education, can impact the real estate market. Stay informed about local economic developments and job growth.
2. Determine Your Investment Strategy
Real estate investing can take various forms, and it’s important to choose a strategy that aligns with your goals, risk tolerance, and resources. Common investment strategies include:
- Buy and Hold: Purchasing a property to rent out long-term is a popular strategy for steady income and property appreciation. Ensure you understand landlord responsibilities and the local rental market.
- Fix and Flip: Buying a property, renovating it, and selling it for a profit can yield significant returns, but it requires careful planning, budgeting, and market knowledge.
- Commercial Properties: Investing in commercial real estate, such as office spaces or retail buildings, can offer higher rental yields but may involve more complex management and higher initial costs.
3. Set a Realistic Budget
Establishing a realistic budget is crucial for any real estate investment. Consider all potential costs, including:
- Purchase Price: Research comparable properties in Saskatoon to ensure you’re paying a fair price.
- Renovation Costs: If you’re planning to renovate, get detailed estimates from contractors to avoid unexpected expenses.
- Operating Expenses: Factor in property management fees, maintenance, insurance, property taxes, and utilities.
- Financing Costs: Understand the terms of your mortgage, including interest rates, down payment requirements, and any additional fees.
4. Conduct Thorough Due Diligence
Thorough due diligence is essential to avoid costly mistakes. This includes:
- Property Inspection: Hire a professional inspector to identify any structural or mechanical issues that could affect the property’s value or require expensive repairs.
- Title Search: Ensure the property has a clear title without any liens or legal disputes.
- Rental Market Analysis: If you’re buying a rental property, analyze local rental rates, occupancy rates, and tenant demand to estimate your potential income.
- Zoning and Regulations: Check local zoning laws and regulations to ensure your intended use of the property is permitted.
5. Work with Experienced Professionals
Building a team of experienced professionals can help you navigate the complexities of real estate investment. Consider working with:
- Real Estate Agents: An experienced local real estate agent can provide valuable insights, help you find suitable properties, and negotiate favorable terms.
- Mortgage Brokers: A mortgage broker can help you secure the best financing options and navigate the mortgage approval process.
- Property Managers: If you’re investing in rental properties, a property manager can handle tenant screening, maintenance, and rent collection.
- Legal and Tax Advisors: A lawyer and accountant can provide crucial advice on legal and tax implications of your investment.
Investing in real estate in Saskatoon can be a rewarding venture with the potential for significant financial returns. As a dedicated real estate agent in Saskatoon, I’m here to assist you every step of the way. Whether you’re a first-time investor or looking to expand your portfolio, contact me today to explore the best investment opportunities in our vibrant city.
Investing in Multifamily Units in Saskatoon: A Balanced Look at the Pros and Cons
Investing in multifamily units can be an excellent way to build wealth and generate passive income. However, as with any investment, it’s important to weigh the pros and cons to make an informed decision. If you’re considering diving into the multifamily real estate market in Saskatoon, here are some key points to consider.
The Pros of Investing in Multifamily Units
1. Steady Cash Flow
Multifamily units offer the potential for consistent rental income. With multiple tenants, the risk of complete vacancy is minimized, ensuring a more reliable income stream compared to single-family properties.
2. Economies of Scale
Managing several units under one roof can be more cost-effective than managing multiple single-family homes scattered across different locations. Maintenance, repairs, and management tasks can be centralized, reducing overall costs and effort.
3. Easier Financing
Lenders may view multifamily properties as less risky than single-family homes due to the steady cash flow. This perception can result in more favorable financing terms, such as lower interest rates and higher loan-to-value ratios.
4. Appreciation Potential
Multifamily properties can appreciate in value over time, especially in a growing market like Saskatoon. With the right property management and upkeep, the value of your investment can increase significantly, providing substantial returns when you decide to sell.
5. Tax Benefits
Investors in multifamily properties can take advantage of various tax deductions, including mortgage interest, property depreciation, maintenance costs, and more. These deductions can significantly reduce your taxable income and increase your overall return on investment.
The Cons of Investing in Multifamily Units
1. Higher Initial Investment
Multifamily properties typically require a larger upfront investment compared to single-family homes. This higher cost can be a barrier for some investors, requiring substantial capital or financing.
2. Management Complexity
Managing a multifamily property can be more complex and time-consuming than a single-family home. With more tenants comes more responsibilities, including dealing with maintenance issues, tenant disputes, and turnover.
3. Market Saturation
In some areas, the market for multifamily units can become saturated, leading to higher vacancy rates and increased competition. It’s essential to research the local market conditions in Saskatoon to ensure there is sufficient demand for rental units.
4. Regulatory Challenges
Multifamily properties are often subject to more stringent regulations and zoning laws than single-family homes. Navigating these regulations can be challenging and may require additional legal and professional assistance.
5. Tenant Risk
Having multiple tenants can increase the risk of encountering problematic renters. Issues such as late payments, property damage, and evictions can be more frequent, requiring effective tenant screening and management strategies.
Investing in multifamily units in Saskatoon can be a lucrative opportunity, offering steady cash flow, economies of scale, and potential appreciation. However, it’s not without its challenges, including higher initial costs, management complexities, and regulatory hurdles. By carefully considering the pros and cons, conducting thorough market research, and potentially seeking professional advice, you can make an informed decision that aligns with your investment goals.
If you’re ready to explore multifamily investment opportunities in Saskatoon or need guidance on managing your current properties, don’t hesitate to reach out. As a seasoned real estate agent with extensive local knowledge, I’m here to help you navigate the multifamily real estate market and achieve your investment objectives.
Feel free to contact me today for more information or to schedule a consultation. Let’s turn your real estate investment dreams into reality!
Know Your REALTOR®: Lisa Mueller
Know Your REALTOR®: Lisa Mueller
Lisa Mueller is an award-winning Saskatoon REALTOR® with CENTURY 21 Fusion, with 12 years of experience in the real estate industry. She has worked with the brokerage as both a real estate agent and a broker manager, offering a wide array of experience in the way she works with home buyers, sellers, and other industry professionals. Even with her busy schedule, she was happy to spare a moment to talk about her experience as a local REALTOR® and why she would be the best fit for finding you and your family the dream home you’ve been searching for!
WHY DID YOU CHOOSE TO BECOME A REALTOR®?
I chose to become a REALTOR® because I wanted to help families, and I had quite a bit of personal experience buying and selling homes! I had moved many times myself. At one time, I had moved 6 times in 8 years, packing up houses and kids, and my husband said to me, “You know, you should really get into real estate. You already know a lot of the processes and I think you could add a lot of value to clients in knowing what it really is like to get a house ready for sale, and to move a family!” So I really felt I had a lot to offer clients when they were going to list and sell.
I think a REALTOR® that has their own experience is vital because they really know what you’re feeling when you’re listing that home. Some of these REALTORS® that we had experienced weren't great communicators, and it kind of felt like they plopped the sign on the lawn and didn't follow through with the things they were saying. So that's what I wanted to focus on when I became a REALTOR®: good customer service and making sure I was communicating properly with the clients and so that they felt that the value they were getting was worth what they were paying.
What's your favourite part about being a REALTOR®?
My favourite part about being a REALTOR® is the clients and, obviously, is the possession days. That’s the end game. The goal is that you’re going to get that house sold for your listing clientele or you’re going to bring that buyer to the new house, open the door for them, and know they’re going to create memories that last a lifetime. It’s just the best feeling ever!
What is something that you think every buyer should know before getting into real estate?
Buyers really need to make sure that their down payment is ready and that they get a good mortgage broker. Don’t just go to anyone. You need to find a mortgage broker that is going to explain to you how the whole process works with them and that they ensure that you are preapproved for a property so that you can actually go out shopping, write an offer, and not have to be concerned or not ready to do so. They should educate you on the costs involved in having a mortgage payment, taxes, and those different various things that a mortgage broker can do.
Once a mortgage broker has educated them, then I can help them from there in choosing the appropriate house. Some buyers need a lot of help with buying a house that’s got some renos and they’re not sure how much they are going to cost. And maybe they’re up for that challenge! But most brand new buyers should likely be buying a house that doesn’t have a lot of things that could come up. Educating them on the expenses is really important for new buyers so that they know what they’re up against.
I try and educate my buyers as much as I can during a showing. I don't just sit on my phone and text people while it’s going on. I'm walking through with them, pointing out things, and showing them where there might be an issue later on or something that we need a home inspector to look through if it comes to a home inspection. I just think it’s so important to educate buyers on the process, on what is a good home and what isn't a good home, so that they can feel really confident that I am representing them and that they're buying the best property they can for themselves.
What do you think is the most important change coming for real estate?
I’ve been in real estate for over 14 years, and it’s definitely technology. Social media is especially playing a huge role in what buyers can buy and what sellers are selling for, and how educated the buyers and sellers are. And as a REALTOR®, you really need to be up to date with it all—where interest rates are headed, how to market a home, how to get the best home for your client. All those nuances are really, really important.
Tell us a little more about yourself.
Well, I am a mother of three. I am super proud of my daughters—they are growing up to be very independent and hard-working. They just motivate, impress, and amaze me every day. I’ve been playing volleyball for over 30 years—I love it. I also have 2 small dogs, and I am a cat-lover, but my daughter is allergic to cats haha!
Other than that, I have an education degree and I did teach for a tiny little bit, and then I raised my kids for a little while. We moved a lot during that time and that’s when I decided to go into real estate and now I’ve been a REALTOR® for over 14 years. For 5 of those years, I ran a brokerage of 97 agents and 7 staff. I helped those agents by training them and onboarding them, educating them, and overseeing their deals.
I pretty much know anything that can go wrong in a deal and how to mitigate that or try to prevent it from happening. I always make sure that I let my clients know that we have to get proper conditions and terms in place on an offer. And, when it comes to listing a property, it must be properly listed—the house has to be measured and the different things that need to be done must be done properly. It’s what I taught agents for 5 years and I carry it with me today.
I also helped the staff with servicing the agents so that they could do their job and be successful at it.
Why do you love Saskatoon?
I love Saskatoon because it’s a beautiful city. The river, the bridges, the people are just second to none. I feel like it’s small enough, but not too small because we have many, many services and things to do here. Still, you can drive here anywhere in 20-25 minutes, unless there's an accident and then it might be another 5 minutes.
And there’s lots of opportunities to move up at different companies, if you’re so inclined. It’s just a gorgeous city that, you know, we don’t really appreciate when we live here, I think. But when I get to show out of province buyers, then I realize even more how beautiful Saskatoon is and how much we need to appreciate it.
What inspires you?
On a day-to-day basis, it’s my girls. I want to lead by example. And so I go out into the world every day, doing my best, and getting things accomplished, working with people that I like to work with. And I think that when clients see me, and watch how I work, they see that I care and that I want to see them happy in their new homes. Or in selling their homes, I think they see that I really want to have them feel very satisfied—more than satisfied with the job I did!
If you could give any seller one piece of advice, what would it be?
For sellers, the biggest piece of advice I have is that they really need to make sure they’re getting their home prepped for sale. It has to be clean, bright, and look like it is maintenance-free, if that’s at all possible. Don’t put it up for sale until, you know, the little things are done. You know, we don’t necessarily need to redo a kitchen, but we do need to touch up paint, clean up spaces, and have the house sparkling clean.
The other thing I would advise sellers to do is study the market, learn the market, and you do that through a REALTOR®. They should not be coming to you and just saying, “This is what we need to list your house for.” What they should be doing is showing all the different listings that
are on the market and those that have recently sold—that is what a buyer is willing to pay, really. And then, from there, you decide with the REALTOR® what that pricing should be. Then you’re going to have way more success.
Is there anything else you think people should know about you when considering whether or not to work with you?
One of the most important things that I add is that I did oversee over 10,000 deals when I was the broker manager of CENTURY 21 Fusion. I saw many REALTORS® come into my office. I was teaching them how to be with clients, how to protect their clients, how to represent them properly. And so I’ve put that back into action now that I’ve gone back into listing and selling properties.
I am very knowledgeable, and I've got a lot of experience. My experience is partly maybe from my age, but more from moving around the province. I've lived in about 12 different houses all around Saskatchewan, and I’ve owned several investment properties throughout the years, so I have a lot of experience with those, as well. We also ran a farm for 25 years, so I even know all about farming communities, small communities, and we had 3 different cabins, so I know about lake properties, as well. No matter what type of property you’re interested in buying, there’s a good chance that I’ve had experience with it and can draw from that to help you make the most informed decision possible for you.
Why CENTURY 21?
CENTURY 21 is an international brand and so I chose it partially because there is so much access to tools and technology that we have. We have great websites, and I can refer anywhere across the country—or, really, across the globe. I think we’re professionals and we don’t just get into real estate because we don’t know what else to do with ourselves. CENTURY 21 agents go above and beyond. They want to ensure that their clients have a great experience!
Lastly, if you could choose 3 words to describe yourself, what would they be?
Kind. Caring. Fun-Loving.
10 Tips for Buying a House
Too often, people rush into buying a house when they’re not ready. Just because you’re sick of renting does not mean you should automatically buy a home thinking it’s the only alternative. Being sick of renting is most definitely a better alternative to buying and ending up with your finances in a mess or with a home that doesn’t fit your needs.
Owning a home is a big commitment, it’s not a guaranteed investment, and it’s a truckload of work. It can be a smart long-term move, but you want to know what you’re getting into. The following tips for buying a home are here to help you get started:
1) Know Your Credit Score
Your credit score is one of the biggest factors in what your loan terms will be. Know your score before you ever try to get a loan, and take the time to repair it if it's too low.
2) Get Pre-Approved for a Mortgage
A mortgage pre-approval means you should be able to get the loan, so long as nothing changes about your financial situation or your credit score. A pre-approval letter also helps when you want to compete with another buyer for a home you love. One of the first things most sellers will ask their agent when receiving offers is how qualified the home buyers are to purchase.
3) Research the Costs of Buying a House
There are a lot of fees that come with a home purchase, above and beyond the mortgage. Insurance, repairs, association fees, property taxes—you should have the income and the budget to handle all of these things if they are relevant to your purchase.
4) Work With an Experienced REALTOR®
Real estate agents are licensed professionals who work on your behalf and advocate for your interests. In most cases, sellers have a real estate agent working for them, so you’ll want someone on your side—a buyer’s agent—who also has your back in negotiations and can help you understand how to make an offer on a home. But that’s not all! Your agent will also help you find homes that match your budget and needs, provide facts on a neighborhood, negotiate an offer, navigate the home inspection, decipher paperwork, and request and review seller disclosures.
5) Understand the Value of the Property You are Offering On
Working with a real estate agent that understands market values in your local area is critical if you want to avoid overpaying for your house.
6) Verify All Information on the Listing
Another crucial thing to do before buying a house is to make sure the house listing is accurate. It would be best if you verified that all the information given about the home is right. Sometimes real estate agents put things in the listing that they may not have verified or may just not be aware of the facts.
7) Use an Experienced Home Inspector
The home inspection is one of the most vital aspects of buying a home. You will want to have someone performing it who is thorough and complete.
8) Check Previous Permits
If a renovation was done without a permit, it might not have been done right. No permit means that the work was not reviewed by an inspector, something you do not want in your new home.
9) Don’t Sacrifice on Location
Remember: you can change the flooring and even the layout of a home, but you can never change its location.
10) Don’t Do Anything to Affect Your Financial Situation
Your mortgage pre-approval is based on the information given at the time of your application. Any changes, like getting a different job or taking out a car loan, can result in denial of the loan request when purchasing a house.
Then the last piece is making sure that the house is in great shape when it gets on the market. I have all sorts of connections for that—painters and stagers and people that can help with decluttering or anything that needs to be done. And I can give my piece of advice, too, as we walk through the home and help that seller decide what needs to be done before we get that on the market.
These tips should help put you on the path to filling in your home-buying knowledge. Remember: that the more you educate yourself about the process beforehand, the less stressful it will be, and the more likely you will be to get the house you want for a price you can afford. But that doesn’t mean you have to go it alone! With my help and guidance, you can always feel sure that you are informed and guided along the way!
