When you go to buy a home in Etobicoke or another region of Toronto, you want your investment to pay off. Despite the hot real estate market in the GTA, not every piece of land, every lot, or every house or condo is an automatic win. With real estate investing, performing your due diligence in buying and selling properties will go a long way in setting yourself up for success.

Here is how to avoid the top 5 biggest real estate investor mistakes.

#1 – An Investor Who Doesn’t Make A Plan To Generate Income Or Gains

Have a plan for every house in Toronto that you buy. Define a clear pathway towards turning a profit. Don’t give into a great deal or a buying frenzy when you haven’t a plan in place because it’s easy for an assumption to be wrong or for the market to sour unexpectedly.

Before dropping cash down, decide on a data-backed investment strategy.

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#2 – Overlooking How Attractive A Specific House Is To A Renter

Some homes are unlikely to be purchased by someone looking to rent. Be realistic about the renter’s market which is predominantly singles, young families, and university students. If your real estate purchase does not appeal to any of these demographics, you may not want to invest the funds.

Think of how you might market a property to the renter’s market before investing.

#3 – An Investor Who Believes Themselves To Be An Expert On Everything

A real estate investor should tap additional resources to evaluate a property and not rely solely on themselves. To avoid an unfavorable investment, be sure to connect with an experienced real estate agent who can shine a light on the market, a home inspector who you know is going to do a thorough evaluation, a list of contractors you can rely on to do excellent work, and a real estate lawyer.

It takes a team to identify potential risks, flaws, and weaknesses in a real estate investment deal.

#4 – An Investor Who Skips The Research And Goes Straight To Buying

Before buying real estate, research is imperative. Compare your house to other properties in the area. Look at neighbourhood amenities and property values. Ask questions and think about the following before buying.

  • If the property is near a commercial site or if there are construction plans near the area.
  • If the area has recently undergone changes or is expected to, in terms of demographics or household type.
  • If the property is located in a flood zone or is in an area known for termite problems.
  • If the house has foundation issues that need to be addressed.
  • If the house has major elements that need to be replaced, i.e. appliances, plumbing, electrical, etc.
  • Why the house is being sold by the current owner?
  • How much did the previous owner pay for the home when they initially purchased it?
  • Its proximity to high-importance amenities, such as grocery stores, hospitals, and major work opportunities.

Hoping to buy a profitable investment property? Check out these related blogs for more insights.

#5 – An Investor Who Does Not Take The Time To Gain Adequate Financing

There are many ways to get the financing to invest in real estate and get a mortgage. An investor should not risk their finances on a high-risk mortgage or engage in high-risk lending, potentially locking them into an investment they may not be able to afford.

Don’t risk interest rates rising and putting you at risk of not being able to pay the mortgage.

Are you looking to buy real estate in Toronto or Etobicoke as an investor? Talk to Adrian + Andrea today. If you’re just getting started, we can show you what properties are most likely to appreciate and provide you with the return you’re looking for. Call us at (416) 319-6893 or email us at info@adrianandrea.com.