comScore
ADVERTISEMENT
Your browser is not supported. We do our best to optimize our websites to the most current web browsers. Please try another browser.
Skip to main content

Scott McGillivray Debunks 10 Myths About Buying a Rental Property

Scott McGillivray Debunks 10 Myths About Buying a Rental Property

Scott McGillivray is a real estate expert and host of HGTV Canada’s Income Property and Moving the McGillivrays.

ADVERTISEMENT

 

Buying a rental property is a big deal, no doubt about it. But over and over again I hear people perpetuating myths that just aren’t true. If you’re thinking of buying a rental property, educate yourself with the right facts, and erase these 10 myths from your mind.

 

1. It’s Not the Right Time to Invest in the Real Estate Market

People are always trying to predict the market and figure out whether it’s a good time to invest. In my opinion the best day to invest in real estate was yesterday, the second best day is today and the worst day is tomorrow. When it comes to real estate investing it’s not about timing the market – it’s about time in the market.

 

2. You Need Prior Training

One of the most common myths I hear about real estate investing is that you need to have business training or previous experience to be successful. I couldn’t disagree more. When it comes right down to it, all you need are basic budgeting skills and some common sense.

 

3. Rental Properties Provide Passive Income

I’ve been quoted as saying that income properties provide passive income, and while it’s true in a general sense, don’t think that you can just sit back and wait for the cheques to roll in. Being a landlord requires your active participation in managing the property, the finances and the tenant(s). Even the simplest unit will require a little effort on your part.

 

ADVERTISEMENT

4. Rental Properties Take Too Much Work

We’ve established that rental properties take some work, but do they take too much work? Not for the rewards you get from a successfully cash flowing property. One of the great things about investment properties – particularly secondary suites – is that you don’t have to work at them every day. So while you will have certain responsibilities, you can keep making money even on days when you’re not there.

 

5. All You Need to Start is a Down Payment

There are many costs associated with running a rental property including insurance, taxes, maintenance, repairs and so on.  A cash flowing property is a great investment, but even so, having money set aside at the start for the general running of the property is a must.

 

6. You Need to Own a Primary Residence First

If you’ve got an inexpensive rental apartment it might make sense to buy an investment property that can start making money for you before you buy your own home. Then you can use the money being brought in to purchase something for yourself. Look at all your options before making a move.

 

7. The Property is Guaranteed to Increase in Value

Real estate is like a yo-yo on an escalator: it goes up and down, but ultimately it’s always going up. That said, buying a property and waiting for it to increase in value is not a great strategy. You need to maintain it, make value added improvements, and as a landlord, ensure that tenants are behaving and respecting the property. A neglected rental property can end up being a money pit instead of an income generator.

 

8. It Needs to be Close to Your Primary Residence

Proximity is great, but not a must. There are some easy ways to make sure properties are kept up and kept safe without you being close by. Smart home technology is great for controlling temperature, lights, locks and so on. And if you’re at all uncomfortable about being so far away, a property manager is always an option.

ADVERTISEMENT

 

9. You Can Get Away with Using Inexpensive Finishes

If you want a successful investment with quality tenants you can’t get away with cheaping out. It’s important to have decent quality items that look good and won’t fall apart.  Remember, the calibre of the property dictates the calibre of the tenant.

 

10. You Can Rely on Tenants to Maintain the Property

Some property owners might want to give tenants a break on the rent in exchange for doing certain things around the property. While it’s a great way to get a few things taken care of, it does not mean that you can rely on tenants to maintain the rest of the property. It’s your investment and your responsibility to make sure everything stays in tip top shape.

Images courtesy of Getty Images



Latest News

Americans take to Google to find out how to move north.
November 8, 2024
These gift ideas for the women in your life are not your usual socks-and-scarves variety. Each one is sure to surprise and delight!
November 7, 2024
Lasagna gardening is a clever name for a clever garden method that's easy, cost-effective and requires less effort.
November 5, 2024
Organizing art supplies can be both functional and fun, and we're showing you a simple and fast way to do it.
November 3, 2024
These 15 beautiful holiday gift ideas for the men in your life are curated to surprise and delight.
November 1, 2024
Use these 10 best Amazon bedroom organization products to tame the clothes chaos and easily organize any closet.
November 1, 2024
DIY
In just three steps and next to no materials, let's transform a simple drop cloth into a chic haunted house for Halloween.
October 31, 2024
DIY
If you're looking for an elegant Halloween craft, these viral floral clay ghosts are the perfect mix of spooky and refined.
October 31, 2024
'Tis the season for sophisticated holiday decor that's merry and bright.
October 29, 2024
ADVERTISEMENT
ADVERTISEMENT
This content is restricted to adults of legal age.
Please enter your birthdate to confirm.
Date of Birth