Incorperating Real Estate Properties

[Stunt]

So my friend and I are actually considering incorporating real estate properties. We have just graduated university; he is going on to grad school, I went out and got a job.

I would be bank-rolling the initial operation with financial backing (but not investment) from my dad (president of a company - large worth) and his dad (extremely well off MD in BC). I can currently save ~$2,000 a month after expenses to put towards down payment on rental properties. I also have $20k in savings; he has $10k (keep in mind he is still in school).

We'd be focused on cities with large universities and smaller populations (London, Hamilton, Guelph, Kingston). This way the tennants are bankrolled through loans, parents and their summer employment. Most of the places around the universities are 12 month leases and can earn $350-$500 per person with 4-6 in a house.

The goal would be to generate $60k-$80k a year each by the time we are 30; perhaps diversifying at that point into commercial property or franchising.

Dad's company has access to accountants, my friend has access to plenty of legal advice, and my mom is a corporate insurance broker. Both of us are motivated and get along great (we will be forming a contract if corporation breaks up).

The Canadian housing market is nowhere near as volitile as the US is. I can get a house here for $200-$250k meeting our objectives. We would be doing minor renos to maximize rental income.

Is this a dumb idea or is this something worth persuing??

 

[Aquaman]

Not a bad idea but it's a lot of work....... sometimes even a full-time job.

Cheers,
Aquaman <<<<<<< used to work for a property management firm

 

[Descartes]

This is probably obvious, but it's not a bad idea if that's what you want to do. I personally would not want any involvement in properties where the primary tenant is in their teens or early 20s. That could be an enormous headache, and if they trash the place you'll see your returns dwindle.

As Aquaman said, it could easily be a full-time job. If that's what you want to do, then go for it. I wouldn't plan on pulling that much cash while you're working another job or hanging out on the beach somewhere though. Of course, if that's what you want then don't let anyone else stop you.

 

[Stunt]

Originally posted by: Descartes
This is probably obvious, but it's not a bad idea if that's what you want to do. I personally would not want any involvement in properties where the primary tenant is in their teens or early 20s. That could be an enormous headache, and if they trash the place you'll see your returns dwindle.

As Aquaman said, it could easily be a full-time job. If that's what you want to do, then go for it. I wouldn't plan on pulling that much cash while you're working another job or hanging out on the beach somewhere though. Of course, if that's what you want then don't let anyone else stop you.

That'd be the reasoning behind going for the students; while they are rowdy at times, you can basically interview them and since they are at a well respected university they will have their heads screwed on right. 😀