Getting Started With Investment Real Estate – Part 2

To start at the beginning – please see part 1 of this series.

My strategy was to find a condo that I felt I could afford and be happy living in (this basically meant quite economical and on the Toronto subway line as I don’t own a car and don’t want to have to buy one). I intended to try and rent it out, and if I couldn’t find a tenant, decided I didn’t want to be a landlord, or couldn’t charge enough rent to make it worthwhile, I’d move in myself (I was hedging my bets).

I met with a Real Estate Agent, and early in the relationship caught her in a few lies. I debated whether it was better to stay “with the devil I knew” or find one I didn’t. In the end I figured I didn’t think I was going to find any saints working as Real Estate Agents and stayed with her.

I met with her and she kept pushing me to get pre-approved for a mortgage and to buy a pricier condo in a “hot” area of Toronto. I kept repeating that I wanted to buy something for a low price near a subway line, and that I wasn’t looking for appreciation (since my intention was to hold the unit for a long time). I think RE Agents are used to selling speculation to clients and it took a while for her to get that my interests were in a different direction, but eventually she got it.

Once she realized that I wasn’t going to stretch my budget, a pre-approval wasn’t necessary any more (I had 25% down for the price range I was targeting). She tried to get me to sign a “buyers agreement”, which would have locked me in with her for a set period of time (if I bought property without her I would have had to pay her commission). I was willing to sign for short periods, but in the end once we’d talked a bit she didn’t bring up the agreement again and neither did I. It kind of bugged me that she tried to tell me the “buyers agreement” was for my benefit (it was clearly for her’s). I’m a pretty straightforward guy, and it bothers me when people try to deceive me.

With an agent to work with, we were ready to start seeing units!

(continue to part 3)