When it comes to strong investments, few are as good as real estate. With D.I.Y. and reality television shows showcasing “easy” house flipping and the path to becoming a landlord, parking your money in property looks very tempting. We’ve all heard the stories of people who’ve made their fortune (billions, in some cases) in real estate, but it can be difficult to know where to start and for every success story, there are dozens of failures.

In Kelowna and the Central Okanagan, real estate is consistently in demand and many projections anticipate that the market will continue to rise for some time. With this in mind, here are some tips for investing in real estate in the Okanagan.

1. Know your market
   Every real estate market is different and we aren’t just talking about a city like Kelowna. Within each region are pockets of micro-markets, different neighbourhoods that each have their own unique quirks and prospects. In working with a realtor, you will have access to their wealth of knowledge and resources to help you make a good investment. You will want to know everything from the history of the area to proposed and rumoured developments and investments from the government and city.

2. Don’t panic
   If you choose to invest in real estate, you need to be prepared for the risks. A major recession like the one from 2008 can be devastating if you don’t have a risk-management plan. Like any stock or investment, you haven’t actually lost money until you sell and, most of the time, if you are able to hold the property and navigate the rough waters, you will see your investment reach its original value again, and typically exceed the original purchase price substantially in the long run.

3. Don’t put all of your eggs into one basket
   Common investment advice recommends that one asset type should never account for more than 50% of your investment portfolio, real estate included.

4. Location, Location, Location
   At the end of the day, real estate is always about location. The type of property that sits on a piece of land can change or evolve, but the location of that land can’t. Buying in a great neighbourhood or in a place that has an outstanding features like views or a neighbouring provincial park will help your property hold its value better. If you have the money to invest in waterfront property, consider it. Afterall, they can’t make any more!

5. The rules of supply and demand apply
   If you have narrowed down the property contenders to a handful of options, be sure to consider supply and demand. If you are looking to purchase a rental property in a large condominium with a high turnover rate, you will likely have more competition when you are looking for renters, or even when you are looking to sell. Purchase a property that has fewer direct comparables and it will be easier to command a higher price or attract great tenants.

6. Consider lowering your rental rates
   While this advice might seem counter-intuitive at first, it could save you a lot of money on your rental property in the long run. When you lower the rental rates on a property, you attract more candidates, giving you an opportunity to find responsible renters with excellent references who are more likely to stay in a home for longer than the initial one-year lease. Items like painting, repairs, and cleaning can add up to a significant cost, so having excellent, long-term tenants can save you money in the end. Not to mention, you won’t lose income in the weeks or months that it takes to re-list the property and find new tenants every year.

7. Don’t get attached
   Canadians typically have very strong attachments to property, whether it is their own home or their rental condo. It is important that you treat your investment property as a business-first investment and not get too emotionally involved, no matter how much you love the location or home. This will allow you to make decisions with a clear head and allow a property manager to take over if and when they are needed.

8. Beware the flip
   Ah, the house flip. That real estate maven that television shows showcase as the #1 go-to way to make a quick buck. The reality is that for many people, flipping houses is a risky business that isn’t for the faint of heart. In order to maximize profit, you need to be prepared to put in some elbow-grease and get your renovations and improvements done as quickly as possible. The longer you hold that house, the more carrying costs you incur so be sure to consult your realtor to help you find the great deals on the worst houses in the best neighbourhoods.

Whether you are looking to invest in a great property that you will call home for years to come or purchase a rental or holding property, choosing the right real estate agent can be one of the best decisions you make. Team Geen has a wealth of experience in everything from residential real estate to large-scale agricultural properties and vineyards. Contact us today to learn more about property investment in the Okanagan Valley.