The Ontario Dental Association, Annual Spring Meeting and Real Estate Investment

July 1, 2012 | Real Estate |

It was my pleasure again this year to have a booth at the ontario dental association, annual spring meeting. This year’s event was particularly interesting and informative.  Dental professionals from all over Canada attended and were impressed by the number of exhibitors with their technical, electronic and computer oriented products on display.  Sales
representatives were present in great numbers to explain their goods and services to curious professionals. in many ways it was all a little overwhelming.

For those of you who dropped by our booth, you would have received a sleeve of golf balls and a ballot for a chance to win a new set of golf clubs.  The winner of the clubs this year was Jeff Reimer of St.Thomas, Ontario and we hope he enjoys them for years to come.  But I digress.  From the conversations i had regarding real estate investment it seemed that some of you find real estate investment overwhelming as well.

Without too much of a sales pitch, let me address some of the common concerns i heard during the show with regard to real estate investment.

#1. My investment advisor does not believe real estate is a good investment.

Let me start by saying,“of course he or she doesn’t!” Real estate should be held long term that means your advisor will not earn a commission on your investment.  If you look at the
world’s wealthiest people, they all own real estate. $imple.

#2. Am I really going to make money?

Granted, not all real estate investors make great money.  Typically this is not the fault of the real estate itself, but rather a result of the inexperience and mistakes made by the investor.  Not everyone is cut out to be a landlord but all real estate investors can get help with management of their property.  When you have a good tenant who pays you correctly every month, they are helping you pay down your mortgage.  That, accompanied with a conservative increase in property value and some positive cash flow creates what i call the
simple equation of wealth creation.

#3. I rent an office for my practice and would never consider moving.

This statement has always perplexed me. my first and sometimes calm and unspoken reaction to this is,“are you kidding me?”  The average dental practice can span between 25 to 40 years. if you purchase the building you are in or buy one in the same area, then you become your own tenant.  This is by far one of the greatest found treasures in your industry.  You can create a nest egg worth hundreds of thousands to millions of dollars over the course of your career.  When you rent, you are making your landlord wealthy!  I know that some of you want to be hands off, but it is still definitely worth buying the property yourself and have a third party manage it.

#4. I am thinking of buying a new condo as an investment property.

I hear this statement often.those of you who have read my articles know how i feel about the new condo market. let me recap.

$500 – $600 per square foot is your average selling price for a new condo in the GTA.  Take your basic 650 square foot unit and pay $350,000. now put 20% down ($70k)
and you are left with a nifty mortgage of $280,000.  Your mortgage payment comes in at a comfy $1300/month.  Now, take your basic rent at $1500/month and you are left with $200/month in your pocket.  But you are not finished yet. Condo fees come in around $400/month with property taxes at approximately $400/month.  Congratulations.
you are now officially a non-profit organization to the tune of negative $600/month.  And yes, some of you are saying, “But it will go up in value!”  But with 42,000 new condo units closing in the next two years (a vast number owned by investors) rents will be driven downward and oversupply will keep values down.  I will say that all of the comments and questions i received were valid and I would never diminish the overall perception in the marketplace but (and yes, there is always a “but”) “do you want to be like everyone else?”

You work hard at your profession that allows you considerable comforts and privileges in your life.You’ve earned those, so allowing your money or your real estate investments to give you a stronger and more stable future for you and your family is also something you deserve.

To conclude, it makes investment sense to have real estate holdings a part of your investment portfolio.

Bottom Line:  This article starts with an assessment of the ODA, ASM and finishes with real estate investment advice.