Revenue Property – Is this a good time to buy?

With the Real Estate market in Drayton Valley heating up again, many people are beginning to consider buying a revenue property again. The town is growing, real estate values are on the rise, rents are on the rise and Drayton Valley seems to be poised for decent economic growth well into the future. For many people this adds up to increased confidence in the local market and is helping to erase the painful memories of what happened in 2008.

So is this a good time to purchase a revenue property in Drayton Valley? The short answer is yes. Values are increasing and seemed to be poised for further growth into the future, and rents are at a level that will cover almost any mortgage payment for any property. This has prompted the majority of people to think almost any property is a good investment right now.

However, there is one factor (possible the most important factor) that many people seem to overlook. CASHFLOW. Many people seem to have the attitude that as long as the rent is large enough to cover the mortgage payment and all other expenses than it must be a good investment. But what happens when (not if) a year like 2008 hits? Is it still a good investment when rents fall well below what the expenses are and the property is now stealing your personal cash flow just to make the mortgage payment, and selling the property would result in a loss due to decreased values?

If you are thinking it is a good time to invest in a revenue property you are probably right. However, ensure you are investing for cash flow, not just for appreciation. Do this and your property will perform well for you in both a booming and slumping market.

John Tkachuk

John Tkachuk

CENTURY 21 Hi-Point Realty Ltd.
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