Property investments? My children and their future.

Decisions about property investment is not an easy one. Buying properties when we have no full-time employment is even more risky. However, it’s definitely possible to make rational and objective decisions when we have evaluated all the options and understand the market. No one can predict the future but when we look at property investment as a LONG TERM decision, it’s usually a correct one. The below is a story of a mother who saw a trend and decided to do something for her children. The place is Canada. The full article in TheStar.com here. (not the Malaysian one, it’s in Canada)
A single mother lost her full-time marketing job during the 2008-2009 Great Recession. (U.S. market predominantly). She started contract work and when she realised that home prices began to rise, she was alarmed.  Her fear was a simple one; her young children may never be able to eventually afford to buy a house on their own. She is also worried that when the time comes, she may not have the finance or even an inheritance to help her children. Fortunately for her though, she has a mortgage-free family home. She used this home to buy houses for each of her pre-teen children. She looked for properties she could afford. For her son who loves sailing, she could a detached house nearby Lake Ontario. For her daughter, she bought a postwar bungalow. She said, “We’re country people and we like suburban living.”
The two new homes were rented out at $2,500 and $2,150 a month. The rents however could not fully cover the mortgages. She said, “I’m subsidizing the houses by $1,000 a month.” She added, “I’m short-term cash poor, but in 20 years each of my kids will have a house and I can move into one of their basements. It’s FORCED SAVINGS.”  Her hunch was correct. Since she bought them, the prices have gone up $500,000 collectively. She said she will not be selling them. It was bought for her kids. As for tenants, she has these three rules: pay the rent; take care of the house; get along with neighbours. Now she involves her children in all decisions, and work, regarding the homes. The children have to help clean up after tenants move out, and assist in choosing new floors, for example, when they need replacing. She drives an older car and seldom eat out. Please refer to the full article in TheStar.com (Not the Malaysia one yeah,it’s the Canada one) 
Someone in Canada showed it could be done.She chose to buy a property each for her children and renting it out today. The rental could not yet cover the mortgage but she is persevering. She has a sound tenant management policies which meant that the likelihood of her meeting a tenant from hell is lower compared to one without. She drives an older car because this ensures she does not spend too much on the unnecessary. She knows her children will not be able to afford a similar property in the future because of the property price increase happening today. Well, she has shared her experience with us. Perhaps time to evaluate and take actions? Happy believing.
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written on 15 Sept 2018
Next suggested article: Medical fees will definitely be more expensive in the future. 


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