Remember when you are a child and see something you like? If you don’t have enough money, your parents might tell you to save, or maybe shovel the neighboring entrance for extra cash.
Being real estate investors is like that. But because most of the things you want to buy is much more expensive than what you can afford to one paycheque, it’s good to have a strategy that employs less labor-intensive ways rather than shoveling the entrance to give you the cash you need (lucky you).
Assess your financial situation
It sounds clear, but if you are going to sink money into something, whether it’s a hole in the ground, a new car, a bank account, or a piece of real estate, you need money. And if you will fill in the hole, save a certain amount of money or buy a property worth a certain amount, you will want to know how much you have to do work – and do it right.
Knowing your resources and who asks the additional capital you need to make an agreement is the main element of successful real estate investments. Resources include not only you – your own finances, now and the future – but people with whom you partner, or who can connect you with prospective partners. These partners ideally include people who can match your investment with their own bags to buy property that can make you both rich (and maybe even famous).
Before you turn to someone else to help, see your own financial situation. Take your asset stock, the funds you have for your disposal, and liabilities, such as extraordinary debt and other claims that reduce the amount you have to invest. You will not be able to secure a large level on a mortgage if you bring a large debt, because this will determine your net wealth – important criteria for lenders in determining your feasibility for loans.
Financial resources to calculations can include the following:
Cash and savings, including tax-free savings accounts (TFSA),
Registered Pension Savings Plans (RRSPS), and Registered Education Plans (RESSPS)
Investment, such as time deposits, mutual funds, equity, and property
When you calculate your financial resources, reduce the amount of debt you carry. Calculate your net personal value based on the difference between your assets and liabilities that help you determine how much money you have to invest.
Tallying your assets will give you your net worth, important criteria for determining your bank loan size or other lenders are willing to give you, but don’t forget that if you want to use resources like RRSPS, there may be tax implications.
Running your own credit checks can disclose important information about your feasibility for loans. Even when all the others show you can be a good risk, poor credit rating will burden your ability to secure the best financing agreement. The main body that provides credit reports in Canada