Came across this article the other day, which mentions how 44% of Toronto condo investors have negative cash flow, upwards of almost $1,000 per month, and the reason they are investing there is for appreciation.
This is nuts to me. I've always shied away from these large markets, because:
They are too expensive,
They don't cash flow, and
It's very risky to invest on speculation (hello start-up tech stocks these days UBER, can we say bubble)?
I've built up a portfolio in a small market, Windsor, ON, where the properties cash flow very well, cap rates of 5 to even 10% in fact.
As a result, it has allowed me to retire as a Realtor and live off the passive income now, because I was able to build a large portfolio because the price of real estate is much lower then these large, expensive markets.
And there are tons of markets out there where real estate is still very affordable.
I look at Pittsburgh, Cleveland, Indianapolis, Chatham ON, east coast of Canada, just to name a few, where you can buy a bunch of properties for the price of 1 in a large market, and the properties cash flow positive, compared to the expensive properties in the large markets.
And these small markets do appreciate in price.
Anyways, moral of the story is, don't believe the headlines all the time.
Don't think you have to invest in the markets that the news is always talking about. You can invest anywhere, even your own city or town.
There are always properties you can buy to rent, as there are always renters in any market. Quit thinking you need tons of money to invest, by investing in smaller markets, where properties are cheaper, you can start investing right away, because you don't need to save a ton of money.
If you want to learn how to find these markets, so you can begin investing in real estate now, enroll in my real estate investing bootcamp. You can enroll for FREE by clicking on the image below.