Buy a big house or 2 smaller houses

[pandaforever]

We have the option of buying

1. a big house,
2. two smaller houses, or
3. a small house and put the rest of the money in the bank. 

We intend to
1.  a big house - rent it out and in return, we will rent a cheaper place
2.  live in one and rent the other one out
3.  live in it and put the money in a term deposit and collect interest

We do not need a mortgage.  We are looking at the fiancial return in 5 years time - since we may not stay there forever but would like to invest our money.  Your input is appreciated!

[steaky]

are you going to manage the rental yourself? Operating a homestay like business? Or hire a company to manager while you are away?

[pandaforever]

If we rent out we will use a real estate agent.  We are not thinking of a homestay business since you need a licence for that.  One of the reasons we are keen to rent out is because you can get tax deductions for rentals - we figure it's cheaper to maintain the house as a rental rather than an owner-occupier.

So back to the question, what would be the best investment?  A big house, 2 smaller ones, or a small one and put the rest in the bank. 

[steaky]

I am told that most rooming houses are operate by the owner which could be heavy work and there could be many issues.  The less hassle option is to buy 2 smaller ones rather than a big rooming house.  Most agents hesitates to manage rooming houses and big houses tend to empty longer periods than smaller ones.  Of course, put money in the bank is the least hassle option.

It's a tough decision.

[hassanbukhari]

I will suggest that don't invest on a place where you are not going to live.

If you do want to invest then go for apartments which are managed by some company. Houses are also good investment but what if something went wrong and need a repair, your tenant is not going to do that and nor your property agent. You are responsible for the major problems in house. Very few tenants are kind enough to handle things by themselves, others just order or threat.

[livefaisal]

Hi,

I will suggest 2 smaller house. There are few reson why i am suggesting.

1-Buying and selling of small house is much easier. Lets say after soemtime you want some cash flow you can easily sell smaller house and ge your money back.
2-If you are buying to rent you dont have to pay any utilities but in case of Condo you have to pay all the utilities and maintinance fee as well. You are gonna end up with nothing.
3-Other thing rather than putting all money in one house buy more with cash+mortage becaz when you will sell it you will get more return.
4- Lot of real estate agent do Property Management. SO you dont have to worry about property management.IF you choose one good agent and then work with him long term he is gonna all the property management.

If you need more info you can contact me  @  livefaisal @ hotmail.com I am Realtor by profession.

Regards,

[newcomer]

Hi livefaisal,

Would you like to disclose where are you placed at?

I am looking for a realtor in Calgary.

Thnx

[hassanbukhari]

Dear Faisal, Since you are in real estate can you please let me know what is better in current condition to rent or buy. Since the property prices in GTA is going crazy what you think where it will stop. Its all feel like bubble. Rents are very low as compared to the sale prices.

[jamescharls123]

If you want to get financial return within 5 years than buying two small houses would be much better for you. From these two houses you can use one house for your personal use and rent out the other one. After 4 or 5 years when the value of your rented house will increase you can sell it out.

[jazzalbart]

Well, I just want to say that whether you are buying or selling, work with a professional real estate agent, who knows all about real estate market. With a right real estate agent you will have the added benefit of working with an associate who takes the time to clearly identify and understand your needs when buying, selling or investing. You should try to get a referral from a friend or family member who has worked with the agent.