So, with the inflation high … can I still build a rental investment business that will have a positive cashflow?

Rental investment in a high inflation environment is still possible. You need to make sure you have a clear understanding of your budget and cashflow.

I am definitely, not an expert on all aspects of rental investments and I highly recommend that you surround yourself with the right team of experts.

Mortgage Brokers, Accountants, Realtors, Lawyers, Engineers, Property Managers, Insurance Brokers, Cleaners, and whomever you need on each project to help you to get in and stay on the right track. The above-mentioned list is not exhaustive, and it only highlights a few names or types of professionals that your project may need.

You definitely, need to start with:

• Your own personal budget and living a positive cashflow life.
• Your projected rental Investment budget (preferably Positive Cashflow)

I know that some of you hear the word budget and your skin crawls. That is so much work to do a budget not to mention keeping on track in a positive cashflow way.

It is one of the most important pieces (in my opinion) in a successful rental investment journey, definitely in a high inflation environment.

When you are positive cashflow it means in the simplest terms that you have:

• Income – Expenses = Positive Cashflow
• Example $2000 – $1500 = $500 (you have $500 towards unanticipated increases)

extra money not spoken for elsewhere that you can hold on to or reinvest into that property.

In higher inflation times everything costs more and the pain you feel is more intense and particularly amplified when you are living in a Negative Cashflow position.  Imagine if your expenses doubled.

• Example from above with double the expenses $2000-$3000 = ($1000)

That is what we are seeing right now. A lot of homeowners are struggling, not to mention rental investment owners.

Did you know …

• Your boss will not be able to double your pay just because you asked.
• Landlords in Ontario must follow strict rent control regulations that prevent landlords from collecting higher rent to double the income.  (most)

That is why I feel that.

You definitely, in my opinion need to start with:

• Your own personal budget and living a positive cashflow life.
• Your projected rental Investment budget (preferably Positive Cashflow)

As the examples above show, when expenses doubled then you could sink fast.  Living in a Positive Cashflow position or having deep enough investments pockets that you can withstand the storm are important.

Rental investment in a high inflation environment is still possible with the clear understanding that you know the numbers.

Melinda Baker               Mortgage Broker M21000893                Verico The Mortgage Station 11707

Phone: 705-220-1608            melinda@themortgagestation.ca            mortgageweb.ca/melindabaker