Hello FNM Community!
Her goals are to live mortgage free, purchase other rental properties, and work toward making those rental properties mortgage free over the next decade, which she is well on her way to achieving.
If you ever wondered:
what the easiest way to get started investing in real estate is?
why having an income property is worth the effort?
how to get started in your real estate journey?
Then, I think you’re really going to love this dose of inspiration from Daria Hill. She is a true entrepreneur at heart, and has lots of valuable advice about the steps to take in order to create success in your real estate journey for yourself.
You bought your first property at a very young age and got onto Income Property. How old were you? Why did you want to go on Income Property?
My husband and I bought our first property when I was 28. A bidding war in the hot Toronto market left us with an overstretched budget and a fixer-upper on our hands. We were homeowners!
The bungalow we bought had a kitchenette downstairs. We were told the previous owners were renting the basement out to a relative. It got us thinking: maybe we could rent the basement out and get help making our steep mortgage payments? Now if only shag carpets, wood paneling, and dark basements were in high demand… We spent our first year gutting the basement ourselves and contemplating how we could piece it together into an income suite.
A year later, we were fortunate to appear on Income Property. The experience was a turning point for us. We learned a lot from host Scott McGillivray on how to become a landlord and how to get a suite rental-ready. Despite taking a financial risk to renovate the property, we were convinced that this would set us up for financial reward over the long run.
What are two or three things that you learned from being on Income Property that could help people who want to continue on an investment path?
a) One of the easiest ways to get into real estate investing is to put a rental suite into your principal place of residence. Not only can you keep a close eye on your investment, it gives you hands-on experience in managing tenants and inherent issues of the home.
b) Getting a cheque each month from tenants and putting it directly against the mortgage shaves years off the term. That translates into thousands of dollars in interest savings and a faster road to becoming mortgage-free.
c) A nice home attracts nice tenants. Having a great property location and a good quality renovation means that you’ll attract a good tenant profile. Tenants will take cues from the suite you present them. Stained carpets, chipping countertops or ultra cheap finishes suggests the landlord does not care enough about the space. Bright lights, clean spaces and modern finishes indicate pride of ownership.
With more than five years with an income suite, can you quickly summarize the pros and cons of having an income suite?
Mortgage and debt paydown
Building confidence and experience as a landlord
Sacrificing some privacy and space
Wear and tear in the suite
What got you started in real estate investing, and why did you choose real estate investing as your main investment strategy over other investment options?
Real estate is a tangible asset that I can understand. Despite some short-term dips in the market, real estate appreciates overall over time. Unlike the stock market which can crash and burn at a moment’s notice, the real estate market is more predictable. Picking a star performer house seems more intuitive to me than picking a star performer company stock. That’s not to say that there aren’t lemons in real estate. But with good research and experience, picking an investment property with low maintenance costs, good cash flow and good bones overall is possible.
Real estate also has many financial benefits: appreciation, equity pay down, cash flow, tax breaks and leverage. Also, I like the entrepreneurial side of real estate investing. You are running a business. The more you put into it, the more you can get out of it.
Becoming a homeowner is one of the best tools to learning your product. My family and I took a hands-on approach to homeownership: a lot of DIY mixed with guesswork and grit. This meant though, that we learned the inner workings of a home – from problem solving common issues like drain pipes clogging to more complex ones like water flooding issues.
What’s your “Why”? Why do you invest in real estate? What motivates you?
I am investing in real estate to ultimately give me more time with my family and the freedom to pursue my interests outside of the 9-to-not-really-5 job. I also want real estate to be an education fund for my child and retirement vehicle for my husband and I.
What aspirations do you have for your real estate business?
My business plan is still taking shape. I want to purchase three rental properties within the next five years. In ten years, I want to own a handful of mortgage-free properties.
What are two things you would advise future real estate investors to do in order to have a happy career, real estate business, and personal life?
Goal setting. This is so important. Sit down with your partner and set goals for your careers, real estate business and personal life. Write these goals down with strategies on how to accomplish them and assign timelines. Revisit these goals together constantly and change them accordingly. Having a clear focus about what you are working towards will help motivate you to action. It also keeps the lines of communication open, helping make every goal a team effort.
People first, money second. The people you surround yourself with attract the type of success you will see. Choosing the right tenants will mean you will have a profitable investment. Putting your family first ultimately means you’ll have a sustainable business with a support system. Surrounding yourself with friends and colleagues who inspire and mentor you, will push you to be more successful in your career and business ventures.
What books have you read that you would recommend to the readers?
The Wealthy Barber by David Chilton
Debt Free Forever by Gail Vaz Oxley
The Millionaire Next Door by Thomas J. Stanley
Real Estate Investing in Canada by Don Campbell
51 Canadian Success Stories from Real Estate Investors by Don Campbell
Think and Grow Rich by Napolean Hill
More than Cashflow by Julie Broad
What tips do you have for the readers who want to start Real Estate Investing or acquire more real estate?
Go to the local library and take out free (!) books about real estate investing. Start taking notes and jot down lessons or inspiring quotes. Read a lot of success stories – they will inspire you and show you that everyday, average people can become savvy, successful real estate investors.
Get your financial house in order. Before you start real estate investing, make sure you have good financial habits. Get rid of consumer debt, follow a strict budget, and learn how to save. These are the basics. Take the time to get this right.
Consider getting mentored. Learn from someone who has done it already. When choosing a mentor, find someone you can relate to. I wanted a mentor who understood the dynamics of being a first time real estate investor, having a young family, and also a busy and demanding career. Tracy Ma was the perfect fit for my life stage and goals.
Now, back to you! Which steps are you going to implement? Start with baby steps and begin your journey to financial peace. And if you found value in this interview, please pass it along to your friends and family. Let me know how I can best support you in your journey through comments or direct emails here. I’m here to empower, guide and encourage you to reach your financial nirvana.