Hamilton is a gold mine. Buyers are moving from Toronto to Hamilton and it comes as no surprise to find experienced investors eyeing the tranquility, the vibrant neighborhoods, in Ancaster, Dundas & Stoney Creek and nearby communities.
Some investors may worry that:
The market will overheat?
Am I overpaying for a house?
How can I not only buy a property, but invest in property?
Here is a FREE guide from savvy Hamilton real estate investors. People have achieved financial freedom using sound investments in Hamilton homes.
1. Get a Wealth Mindset: Think Bigger
Wealth is what you don’t see
Success in real estate begins with a positive attitude. Some buyers never get started because they become obsessed with interest rates, prices and fake news. But long-term investors in the Hamilton real estate market know that the population is ever increasing, GO train expansion and a vibrant economy anchored in Education ( McMaster University & Mohawk College) and healthcare.
💡 Key mindset shifts for Real Estate investors:
- Consider long-term investments: consider the prices in 10+ years, rather than in a month.
- Live with volatility: expect volatility to occur in the price in the short term.
- Know your budget and stick with it: lay out targets (which amounts to how much risk you can handle (e.g., $5,000/month passive income).
🏗️ 2. Don’t Just Buy Properties: Build a Plan
Purchasing rental units requires a strategy, like sailing a ship with a compass! This is how the experienced real estate investors buy real estate:
- Millionaire mindset – Earning a million dollars is all about knowing which are the best neighborhoods to buy a house in: Ancaster, Binbrook, Dundas, Mount Hope, Stoney Creek, or the up and coming Barton Village.
- Buy multi family units– for example- a duplex, triplex or fourplex in Hamilton Mountain or Burlington areas, which can still cash flow $500–$2000/month.
- Own a Million dollar house in Hamilton – Earn cash when the mortgage gets paid off and price increases.
3. Have High Standards, Your Conditions and a solid Real Estate Network: The Hamilton Advantage
Some factors to consider to have success with Hamilton Real Estate Investing:
Have High Standards, look for properties that:
- Net positive cash flow
- Have a 5-10 % cap rate (available in East Hamilton)
- Are close to infrastructure development (e.g. LRT routes, new hospitals, public transit)
Terms:
- Typically you will need to put down at least 20 % of the purchase price as a down payment
- Include financing clauses, home inspection, insurance inspections as part of your due diligence period
Network:
- Experienced Hamilton agents who are familiar with the Best Hamilton neighborhoods
- Capable mortgage brokers that have more than competitive mortgages rates
- Honest and hardworking Contractors that know how to efficiently renovate homes at a competitive price
4. Emphasize Cash Flow and Equity Growth
To generate sustainable wealth:
- Have Positive Cash Flow- this is your Net income after paying your expenses like the mortgage, taxes, utilities, insurance and maintenance.
- Build up your homes Equity- When you pay down your Mortgage and your property increases value over time, you win -TWICE!
To give an example in Hamilton, the right duplex or triplex can have a positive cash flow of $500-$1000 per month. Your tenants are paying off your mortgage for you! Your net worth is increasing.
“Good investing does not consist in making good decisions. It is a matter of always not messing up.”
Owning good properties and holding onto them, can generate significant wealth in the long run.
🛡️ 5. Managing Risks
Hamilton has a better real estate market than Toronto market
Protect yourself by:
- Having 3-6 months in cash reserves for each property.
- Making accurate accounting of rents and bills.
- To conduct stress-tests for your deals using higher interest rates than the current ones.
You will be able to pass through downtimes in the market without having to panic-sell by allowings for a margin of safety.
📈 6. Systemize to Scale your Portfolio
In order to get grow your real estate portfolio, from one to many properties,
- Automate rent collection with your tenants
- If you don’t want to deal with tenants, hire a reputable property management company.
- Come up with screening, maintenance and lease renewal checklists on tenants.
Systems save your time and money, allowing you to concentrate on strategic growth as opposed to daily tasks.
7. Measure What Matters
To keep your eyes on your goals of financial freedom, monitor:
- Cash-on-cash return – Are you achieving your projected cash revenues?
- DP Monthly net cash flow – Are all the properties cash generating?
- Mortgage principal paydown – How quickly is your equity increasing?
- The appreciative trends = Is it paying off?
These items will help you to see if you are making sensible business decisions based on numbers.
Final Thoughts: Action instead of waiting to Time the Real Estate Market
The window of opportunity that Hamilton holds NOW will not always remain open.
Some investors keep trying to time the market, which is impossible to do.
Take action now: establish your goals, create your strategy and begin to accumulate income generating assets.
Remember: Investing in real estate is a long-term and passive investment strategy. Want to get deeper? Contact us for personalized guidance on building your Hamilton investment portfolio.
