Real estate investment offers a lucrative return for those who know how to play it smart – but getting started is the real trick, and those who try to go it alone soon find themselves in a minefield.
“I tell people when they are starting out, you’ve got to have your team in place,” says Garret Wong, president of Garamark Property Management in Winnipeg, Man. “You have to have a real estate lawyer, an accountant, a good property manager and a good real estate agent who knows the investment market – preferably an agent who has one or two investments themselves.”
Then and only then should an investor seek out a property management company to take over the managing of everything else, continues Wong, so when the papers are signed, “we can pick up the keys from the lawyers, read the meters – ideally the investor doesn’t have to come to the property at all.”
A lot of people think that property management is just about collecting rent, says Wong, which causes some people to think, “if I could just find that one tenant to collect and post the cheques.”
And sometimes you do get lucky; but then there are many more times you don’t.
“I’ve had clients who’ve paid for a $700 or $800 plane ticket from Toronto or Vancouver to come out here to the property and then go back. Now that is a very, very expensive lease,” he says. “And then when the wheels fall off – the phone is out of order or the tenant bounces a cheque, they lose their job or there is a divorce – you can scream all you want, and those events happen all the time, rent doesn’t get paid, and somebody has to go knocking on the door.”
“That is the business of property management,” says Wong, “and that is where we come in.”