Investing in Real Estate

[Thomas10]

Hello Everybody,
I am Thomas from Barrie, I would like know what is the best low risk investments for high return...
I have been thinking about investing in Real Estate in my town Barrie and I want to know your opinion...

[Thomas10]

I was thinking also about other options that are more risky than Real Estate like:
Stocks
Cryptocurrencies

[ING_rep]

Hi Thomas,
I'm no expert, but have been looking for way to invest money without too much risk.
I'm using Wealthsimple for ETF trading, they invest and rebalance your portfolio for you. So it's passive investing, and more for long term.
I'm also in line for Wealthsimple Trade, $0 fee trading.. You can get early access by registering. If you register using my link, I move up the line. If you share your link and people register, you move up the waiting list https://wealthsimple.com/trade?r=71XIa

In the meantime, I'm using investopedia to 'practice' trading and see if I can avoid doing rookie mistakes once I'm actually playing with money. The lurking bear market ahead is scaring me at the moment.

If you're going to invest in real estate, I suggest you know your market very well, and invest for long term, unless you plan on doing flips

Good luck, let me know if you have new ideas where to invest, I might jump in too!
K

[Ciel]

Happened to see in today's Saturday issue of the Toronto Star Homes section-a single parent has invested her money in two homes that will belong to her minor children in the future. She is using them as rental homes for now and has used equity in her own home to finance the other homes' purchases. Her children are involved in the upkeep and decor of their homes too.

https://www.thestar.com/life/homes/2...ds-future.html

[Shwa Girl]

Happened to see in today's Saturday issue of the Toronto Star Homes section-a single parent has invested her money in two homes that will belong to her minor children in the future. She is using them as rental homes for now and has used equity in her own home to finance the other homes' purchases. Her children are involved in the upkeep and decor of their homes too.

https://www.thestar.com/life/homes/2...ds-future.html

Its an interesting article.
Some red flags:

• two financial planners warned her not to do this plan
• she can't meet the mortgage payments with the renters and has to pay out of her own pocket each month. If something happens to her job, she will be forced to sell one.
• she thinks that mutual funds only makes her 4% per year, when many can yield 7-10 % per year, with a track record to prove it
• she did not talk about factoring in maintenance costs
• maybe children should be contributing to their future housing, along with their single mother
• what if her adult children get their first job in Thunder Bay or the States or Europe? What happens to her plan for them living in these houses?

[Ciel]

@ShwaGirl -the article mentions that each house was bought in line with her kid's interests in mind. The son likes water so his house is near it. The daughter and Mom like the area in which daughter's future house is located. Let's hope both kids will have Internet and some tech savvy to work online to help make money at their respective future homes.
I'm fairly certain that Mom will make a contract with her adult kids (3-4 years' time) to have them arrange for maintenance or other needs for their houses if they cannot do the work themselves (due to school, distant work or other reasons) because Mom's money/credit is involved in the homes.
What a bonus that one tenant happens to be good at repairs!

[brunt]

Hello Everybody,
I am Thomas from Barrie, I would like know what is the best low risk investments for high return...
I have been thinking about investing in Real Estate in my town Barrie and I want to know your opinion...

Low risk or high return. Pick one. I am not trying to be snarky here. But your question is exactly the one that unscrupulous "advisors" want to hear.

Real estate purchased with a mortgage can be a great way to make money in a rising market. In a flat or falling market, it can be a really, really bad idea.

And stocks can be less risky than real estate. For example, buying bank stocks for the regular, lightly taxed dividends is about as low risk as investing gets.

It is difficult to really advise for all situations. For example (and I don't expect answers to these questions, I just want to outline what you have to ask yourself):

• If you lost your job, would you be forced to relatively quickly sell your investments? If so, then you cannot afford to invest.
• If your investments went down 20%, could you afford it? If not, then you cannot afford to invest.
• Are you just hoping to "hop on the bandwagon" of an asset that has just risen without any good concrete reason? Then it is probably not a great idea.
• If you do not have a savings cushion, then it is probably wisest to build that up before trying to invest.

Investing in real estate in an environment where interest rates are going to be consistently slowly rising is highly questionable. As rates increase, real estate prices fall. I may get blasted for saying that, but it is true.

Real estate and the stock market are not just big casinos where the little guy just always wins. If you cannot afford to lose - even for the short term - then you will have to very seriously ask yourself if this is really something that you want to do.

And if you do not entirely understand the asset, nor do you understand how your income taxes are affected by that investment, then you should probably learn about that first.

I don't mean to come across as a naysayer. There is a lot of investing that one can do as a beginner. But jumping in with the sharks is not necessarily a good staring place.