Quotations by Calum Ross

Your after-tax rate of return must be greater than your after-tax cost of borrowing or the financial math won't add up in your favour. Based on everything you know about the history of your investment type and the best advice of the professional team you employ, ask yourself what the average and worst-case scenarios look like. If you can't live with the worst-case scenario, don't move ahead with the investment. Across Canada, real estate has returned on average 5.5 percent over the past thirty years. But perhaps you might be extremely unlucky and find yourself in a ten-year lull where the market returns only 3.5 percent. Keep this in mind (and stress-test for it) when deciding whether to borrow money to invest. [2017] - Calum Ross

Simply screen tenants by calling their prior landlords, checking their credit history to find out if they've missed many payments in the past, confirming their income, and having them fill out rental applications. Many landlords don't take these steps, which I suspect is where most real estate horror stories come from. [2017] - Calum Ross

Never borrow to invest unless you're a hundred percent certain you are insured against all realistically potential catastrophes. This is an important point, because different properties will have different insurance requirements. The type of property, neighbourhood, and renter profile will define what type of insurance you need. Find a great insurance agent connection and learn the basics of rental real estate insurance. [2017] - Calum Ross

It is vitally important to select a qualified mortgage professional who focuses on investment real estate and understands the investor's wish to use borrowed money to invest in multiple properties. Formal financial-planning training is also a critical component of being able to advise effectively. If they are competent enough to be a mortgage professional for an investor like you, he or she will start off by asking, "What's your goal?" [2017] - Calum Ross

There are four ways to profit from real estate. The first is mortgage pay-down. You can rely on your real estate investments to reliably pay down your mortgage. As the mortgage is paid down, your equity goes up. Second is cash flow. Once all of your property expenses have been paid, the money remaining is your cash flow. Third is appreciation. We have incredibly strong historical proof showing that the real estate market rises gently over time. Fourth is forced appreciation. Properties that are renovated to a certain modern standard earn more income. This could be cosmetic and, therefore, lead to higher-quality tenants desiring the property, or it could be structural and, therefore, change the use of the property (from one suite to two, for example). [2017] - Calum Ross

Multiplexes typically earn stronger cash flows, especially when they are purchased outside the downtown Toronto area. [2017] - Calum Ross

Renovations aren't a good fit for every investor or even most investors. Some investors, especially those later in their financial life cycle, would be dramatically better off purchasing a turnkey property - a property that's completely ready to rent, often with tenants already renting. [2017] - Calum Ross

In the worst-case scenario, you will want enough cash sitting in the bank to cover all the carrying costs of owning a real estate property for three to six months.  [2017] - Calum Ross

A good rule of thumb is to budge 10 percent of total income for property management, but it will depend on the property type and the area you live in. Ask your real estate agent about the correct numbers to budge for your property type and area. Also ask your real estate agent for property manager recommendations. A great agent will have trusted contacts in this area. [2017] - Calum Ross

Generally speaking, variable interest rate mortgages will save you money compared to fixed rate mortgages in the long run, but that at any given point in time you need to assess the risk-and-return trade-off of the two options. [2017] - Calum Ross

Always choose a real estate agent who is also invested; Always chooses a real estate agent with several years of experience (at least five to ten years in the business); Always get a recommendation before choosing a real estate agent. [2017] - Calum Ross

There are communities of investors in every major town across the country. There are multitudes of investment clubs, along with untold thousands of loose, unofficial networks of individuals meeting for coffee or beer. Every agent can look on the MLS, but only a deeply connected agent will be able to bring you deals before they hit the MLS and those rare gems that could only be pulled off by them. This is why getting recommendations from other investors is one of the best ways imaginable to select a real estate agent. [2017] - Calum Ross

Many mortgage lending credit-risk departments want you to have no less than $50,000 in investable assets outside of real estate for every property you own. They do this for two reasons: 1) they want to see investment diversification so you do't get into financial trouble; and 2) they want you to have the backup liquidity to endure a surprise maintenance cost or short-term tenant strife. [2017] - Calum Ross