Despite what I read on Garth Turner's blog I think there is some longevity in real estate investing. Especially in such an affordable city like Winnipeg where you can easily locate rentable condos and properties anywhere from $60-$160,000. Very feasible mortgages to carry. I would say probably 99% of rental units here require lease agreements as opposed to month to month rentals in BC. Leases are fabulous for landlords. Nothing like securing your rental income and stability from a tenant! Heck, I could become a slum lord here in NO TIME at all =)
There are some lovely blogs to read out there about real estate investing, such as the Million Dollar Journey which also has lovely information about the tax benefits of being said slum lord.
Basically it enables you (a) to build equity in real estate, of course, but WHILE you are doing so you are also able to write off these things:
* Mortgage Interest (from your annual statement)
* Property Taxes
* Insurance
* Maintenance/upgrades
* Property Management fees and some condo fees
* Utility bills (if you include them in the rent)
* Office supplies
* Car (if you do the property maintenance, to supervise or inspect your property,)
* Internet connection, telephone, cell phone (portion used for business)
I could use my computer for business- online banking, communicating with the tenant, yada yada and BLOG about my investments etc thusly making my computer a [partial] write off. As would be my internet connection (% for business use), office space in my principal residence (% of mortgage interest/tax/insurance and utilities), office supplies related to the business, domain and web hosting costs, any advertising costs and even travel (if it’s for the business).
My thoughts are to start dabbling in real estate investing by purchasing another small affordable condo in the Spring that I can sublet at a rental price that will cover rent/ condo fees/ property taxes and property management fees. From here (let's say next Fall) I would like to purchase a duplex, renting out the other half. If I were to make a 5 year plan I would like to say that in five years I would like to 100% sublet my duplex and my 2 condos and move on to purchase myself a principal residence. Long term, I have the ability to continue renting these units out or sell and reinvest in another vehicle.
The cons of real estate investing? These are market volatility, being a landlord... being a landlord and... did I mention being a landlord?! So much depends on the market and securing decent tenants. What if the interest rates skyrocket like in the 80s? What about having so much invested solely in real estate? How do I "balance my portfolio" (she said, wryly, knowing that the portfolio at this time consists of what... RRSPs and an RRPP?! Phht!) Still, this warrants further discussion and I plan to meet with a Chartered Accountant to see if this is worth creating a business plan for. Then... then I will rule the world!!!