Robert Leonard  4:15  

I figured given that context a lot of people in the US will know the name Keller Williams, Coldwell Banker, RE/MAX. I figured putting those two together and comparing the two would probably be valuable for the audience.

Jas Takhar  4:25  

It’s a great *inaudible*. In Canada, Royal LePage has been around for 110 years now. It’s the longest standing franchise, but it’s also the largest in terms of the number of realtors, which is a little over 22,000 now.

Robert Leonard  4:40  

Let’s talk about you a little bit more. When you were first getting into the real estate industry, were you focusing more on being an agent and building that business or were you more focused on becoming an investor yourself and then building that business?

Jas Takhar  4:53  

Kind of simultaneously. I was trying to do both. The way I actually got my license 15 years ago, I used to be a car salesman. I thought signing up for the course was me getting educated on how to invest in real estate. 

When the book came, and it was done through correspondence back then, and it’s a “how to be a registered salesperson.” I thought I was signing up for someone who was going to teach me how to invest in real estate. 

Then as I got the book, I thought, “You know what? I was in car sales for three years. I was in the banking industry. I used to sell shoes. Before that, I have a paper route. So sales and service has been in my blood since the day I was born. We all are amazing salespeople.” 

I have two little boys, six and four. I think they’re the best salespeople in the world. They just don’t know how to take no for an answer but I think it leaves some people… I think what happens is, you hear no so much as a kid that it tends to leave you. For me, it just never did. 

When I got that book I wanted to give it a shot. I sold some cars to some real estate agents at that time. Looking at their credit application, I saw how much they made. A couple of them, like English was probably the third language. I thought, “I’m not the smartest guy in the world but I’m born and raised here in Toronto. I can speak the language pretty well. I’m going to give this a shot.” 

At the same time, I got hooked up with a mentor at that time. He passed away actually, almost three years ago. He took me under his wing for 13 years. He was like an older brother to me. He was always into investing in real estate. It’s why I kind of joined his team. 

At that time, I was just like a regular real estate agent who’s helping people with their first condo, moving up and down into bigger and smaller homes, but always looking at our MLS, the multiple listing service, just to see what a property sells for and what they rent for.

Growing up, I have two older brothers. My father was a taxi driver his whole life. My mother was a factory worker her whole life. Having three sons, we didn’t have a lot of things but it wasn’t growing up with anything. We were into sports and the way that they paid for a lot of that, my parents always rented out their basement apartment. They never had a massive portfolio. In fact, they never invested outside of their principal residence. Within that principal residence, they always had the basement rented. 

As a kid, I didn’t like it because you don’t get to use the basement apartment. But I quickly learned why my mother did it and she was fantastic from a customer service perspective to the tenants, like just treating them like customers. We’ll talk a little bit more about that, like some tips I have for landlords and investors. 

However, there’s something I can scale. I can get a couple of properties. We all know, here in the Greater Toronto Area, there’s like a Little Italy area, for example. A lot of the Italians live here. You know that the gentleman, the grandfather, and the grandmother who own seven houses on the street, he still cuts the grass, he still shovels the snow, for what he did and does is buy those properties and just rinse them out. That’s something that I always wanted to grow, but I never invested in real estate until at least six years into this 15-year career that I’ve had now.

I get asked a lot from new investors, should someone who’s getting into real estate investing get their license, should they become an agent, or at least have their license to become an investor? What are the benefits? What are some of the drawbacks? 

The benefits are that you’ll get first access to some properties here in the GTA,  this Greater Toronto Area, for your out-of-province and out-of-country listeners. That’s a 75 kilometer radius. We do a lot of new build projects. 

Being a realtor, you’ll get first access to that. There’s a huge benefit from being a platinum agent in that process. The builder is going to allocate units and they’re going to increase pricing about three to four times. If you buy in the first access of that project to see even just a second, you’re seeing a $20,000 price increase from the first to the fourth, it could be 70 grand. Having that access at that first stage is huge. 

I think some of the drawbacks, Robert, is the fact that when you invest time into being a realtor, the money… You can pay someone else to do that. In fact, there’s a lot of investor savvy realtors who will do that work. It’s almost like trying to fix your own toilets. Like how you commented about my studio here, I have a bunch of shelves in the room I’m in. Man, I can’t put these shelves off myself. I know what I’m good at. I know what I’m not good at.  

I think there’s definitely one or two benefits. I think the drawbacks are actually… I want to make sure people don’t hear me as, “I don’t want you to be a real estate agent.” I think you should, if this is your passion. You want to help people and sales and services is something that you want to get into. 

However, if you’re only getting your license to invest in real estate, I think you’re better off, for example, raising money, going to network with other investors, learn from what other investors have done really well and where they’ve made mistakes. You don’t do that. Rather than spending the time and the energy of just getting your license because other than that example that I use with a builder, you’re not going to see much more benefits from that.

Robert Leonard  10:00  

It’s not so much that becoming a licensed agent isn’t helpful but it’s just there’s the opportunity cost, there’s better things you could do with your time than do that just to be an investor.

Jas Takhar  10:10  

Look, I’m a broker, man. I manage a team and I have a vested interest for people to use our team and use our services. However, the truth of matter is, you don’t need a real estate agent to do anything in the whole process. The lawyer is going to close the deal. You can find your own properties. 

In fact, I wrote a book, for anyone who’s listening. I mean, there’s no cost for this book, it’s absolutely free. Let Robert know or get in touch with me, we’ll figure it out and we’ll mail it out to you. I actually teach people how to buy their own home, how to sell their own home, how to invest on their own, where they don’t actually need the services of a real estate agent.

Can a real estate agent make it easier for you? Yes, because we have access at our fingertips. We have experience as well as connections. We can quarterback the whole process but I want to make sure that everyone understands, you don’t need a real estate agent to buy-selling investor property. 

Robert Leonard  11:02  

Some people that reach out to me that have talked about wanting to forego the corporate career and go down. They’re passionate about real estate. They’ll go down this route of becoming a real estate agent. They say one-eight percent of real estate agents make 80% of the money in the industry. Maybe that’s a little bit of a stretch, maybe it’s not. Maybe it’s accurate. Anyway, they say that.

Jas Takhar  11:20  

I think it’s 5-95.

Robert Leonard  11:22  

It might be and it might even be more. I’ve heard that too. So there’s a small percentage of real estate agents that make the majority of the money. How does someone listening to the show today go about becoming a successful agent so they’re part of that small percentage that makes the most of the money? 

Jas Takhar  11:37  

I owe everything to this business. Outside my family, this business has given me so much. It allows me to make friends and make money. Then actually, truly creating wealth long term. I think the best advice I can give to anybody is if you’re thinking about getting into business, really in any business, any industry is to learn from somebody who’s already doing what you want to do because they’ve hit their head against the wall, you can cut what they’ve done in half. 

One of the main reasons I’m sitting here with you right now, and I was able to say it’s… I have a business partner, but there’s three of us. That one partner passed away. When I met him then, he was in the business for 24 years. I’m at 15 years now. 

When he passed away, he was about 34 or 35 years in the business. I’m at the 15 year mark. Now, I’ve surpassed what he was able to do in his 35 years. That’s not because I was great. That’s because I didn’t have to make all the mistakes he made. I was able to double down on the successes he had.

The first thing you should do… and I have four or five team members on my team right now. They’re 19 to 20 years old. They are just getting started with me. They don’t know what they have in front of them because they’re seeing me do podcasts and videos and clients calling in and a lot of its inbound now. Not that we don’t do a lot of outbound, but it seems a little bit easier for them.  

I laugh with them and I say, “It took 15 years to be an overnight success.” 

Robert Leonard  13:15  

You’ll probably mentor someone if you’re not already. They’ll do what you’ve done in 15 years in five or seven. 

Jas Takhar  13:21  

With the one boy that’s with me right now, I call him *inaudible* for a reason. He’s my protege. You probably dealt with him yourself, Luke. He’s just plenty. I laugh with him because I got socks that are 20 years old. 

I see so much of myself in him the hunger. I think once he gets over understanding how much patience he needs for this to work, if there’s somebody right now around me, it’s going to be him, because he just has that hunger. He’s always asking what to do and always putting up his hand. In fact, if he doesn’t do it in seven or eight years, it’s a little bit of an insult for me. That’s a little bit of a dig to him, because he’s in the room. 

All kidding aside, you’re totally right. He’s going to be someone and there’s going to be others who will  come as well and that should be able to do it because they’re also going to do it in their own style. 

I’m not doing what my late partner is doing. It’s totally different. I wanted to kind of blaze my own trail, so to speak. The guys and gals around me, they’re going to pick up on things that worked well that I did. They definitely will because I’m not going to let them make the same mistakes that I did.

If someone is able to become a successful real estate agent, is the next logical step for them to open their own brokerage or is there a better next step?

I can talk about what I did. We had our own brokerage at a start and we quickly realized that having our own brokerage was not in the best interest of our future goals and objectives. 

What I mean by that is that right now, REC stands for real estate center. That’s our team name. It’s REC Canada to be exact. It’s under the umbrella of Royal LePage Signature, which is a franchise.

The reason we did that is because we realized when we had our own brokerage, I mean, A.) we were paying 50% in expenses, okay? But B.) it was the bandwidth that it chopped. For example, worrying about who’s answering the calls in the front, worrying about the accounting, having trust accounts open, all the legal stuff, and dealing with the Real Estate Council of Ontario, Canadian Real Estate Association, having all that in place. It took us a way and we spoke about it earlier, right? The opportunity costs.

It took us away from our core skills, which is producing content like now for sure. Even back then, it was basic. It’s marketing and sales. That’s what real estate is. If you need to be belly-to-belly with people, you need to find out how you can meet with more people at once. We were able to make these shifts, right?

For example, I just came off of doing a 12-hour real estate investing marathon. I went for 12 hours straight. I did a webinar. Obviously, with the time of this recording with a pandemic, I had to do it in a webinar status. I had over 2000 people watch this 12-hour marathon, close to 800 to 900 people on it stayed on for the 12 hours. I was able to think of these ideas, think about the content, bring in the speakers and all the stuff around it because I’m not worried about running the brokerage.

Right now, the broker of record, that’s what he and his brother worry about. We pay them 10 cents on the dollar and I get to focus on what I’m good at. 

We want to actually… I like being on a podcast with *inaudible*. That’s all I want to do. I want to scale that out, because now I’m going to be speaking to thousands upon thousands of people, all at the same time, rather than worrying about the nitty-gritty of a telephone bill and the utility bill. The tipping point for us is that our old brokers phone lines went down. We had 52 agents at that time in our brokerage and they’re all freaking out as they should. Client calls are not coming in, appointments for showings on home viewings are not being confirmed and booked. 

That’s when I thought, “Damn, imagine we didn’t have to worry about this.” As I believe in anything, like once you define what you want, and why you want it, the how will always appear. We went for a coffee, looked up at the Starbucks and above the Starbucks was a banner which is Royal LePage, a brand new office. 

We walked in at 17 or 18,000 square feet. This was exactly 10 or 11 years ago. We walked around and back there were big plasma TVs, all that kind of stuff all around the office. I then thought this is where we need to be. They’re taking care of like, as I do this recording with you now, I see stuff being cleaned. It’s being vacuumed and the garbage is being picked up. I didn’t worry about any of that stuff. I get to focus on the core competence.

Robert Leonard  17:42  

Let’s transition and talk a bit more about the investing side of real estate. Where should a new investor start?

Jas Takhar  17:49  

Well, new investors should start with building up their team and the first person that they should be. I like to think of the most important person in the process as the realtor but we’re not. As I mentioned before, you don’t even really need us, but we’ll make it easy. 

The first person is, in my opinion, as an independent mortgage broker, he or she is able to work with lenders, right across the country. 

In Canada, there’s a little over 520 odd so lenders that even me being in the real estate industry for 15 years, I probably only know 18 of them or 22 of them. The independent mortgage broker, he or she, you’re going to go to that independent mortgage broker. They’re going to do all the homework for you, all the legwork and all the research. They’re going to shop for the best because it’s not only the interest rate what you’re paying on the mortgage. It is very important. 

However, not the only thing that matters, but they’re going to worry about the terms. For example, prepayment privileges. You’re going to look at it and especially from an investor’s perspective, you want to work with an independent mortgage broker that has investment properties of their own, but work primarily with investors because buying a condo to live in, or a home as a first time homebuyer is totally different. 

When you’re trying to build an investment portfolio, this independent mortgage broker needs to set you up. Not the first to the fifth property. Really anyone who got their license yesterday can help you with that. It’s going from the fifth to the 700th door, if that’s what your goal is. 

If you want to sit down with an independent mortgage broker, first, work out your budget that will determine which property can we look at first and set you up at that 30,000-foot view, essentially for future properties. 

Then what you start to do is build out what I call your real estate all-star team. Start with that broker and mortgage broker. Then look at a real estate broker. Again, ask if they own investment properties, because if they haven’t signed on that dotted line themselves and had the shakes while they’re doing their first property like I had and so many others before me, then I don’t know if you had exactly…. 

I’m sure you have Robert. I want to make sure that you’re working with somebody who has the confidence and the experience in also helping other investors.

Then you build out your real estate lawyer. The secondary team, it’s really kind of a second line, right? Your home inspectors, your contractors, your insurance brokers, and so on and so forth. 

However, the first stage is really figuring out that team and starting with that broker, but also having the mindset. I think the mindset is very important. A big mindset can be why do you want to do this and why? Because it’s going to get tough.

Lenders are going to say, “No.” You’re going to lose out on property. You’re going to have a lot of naysayers around you. Your uncle or the barber will say that when he bought a property in 1972, the value didn’t go over. You will also hear some horror stories about a tenant that they’re going to tell you. 

When all that noise, that external noise comes your way, your what and your why should better be strong enough. I don’t care about the how. I don’t even want you to care about the how because the how will always appear. It’s the what and why that have to be really strong.

Robert Leonard  20:52  

I think that’s going to transition into some of the mistakes that new investors make. What are some of the most common mistakes that you see investors making? Are they not having that why and that’s maybe why they fail? Or maybe they’re not finding their team members in the right order? What are some of those mistakes that you’re seeing new investors make?

Jas Takhar  21:06  

Definitely not working with an independent mortgage broker, because I just think we have five or six major banks here in Canada. They’re not a nonprofit organization. What they do, I mean, it’s a great business to work for years upon years, but the red bed, that’s kind of their logo, they’re not going to tell you about the green banks’ best rate and terms. 

Just dealing with your own bank, because in today’s day and age, we don’t have that warm, fuzzy relationship with a personal banker anymore. Everything’s done online or full-on apps nowadays. 

If you don’t have that connection, it was definitely privy… We were all privy to it back in the days, 20 or 40 years ago. Starting out with an independent mortgage broker, for sure. 

However, I also think, you know, some other mistakes that I’ve seen is that they get very emotional. When you’re investing in real estate and that’s all they really talk about from an investment perspective, because it’s the only thing I know. I don’t do this. I don’t invest in stocks or anything like that. Not that there’s anything wrong with it. It’s just my path to real estate.

If you allow emotions to get involved, then you’ll tend to make more mistakes because you’ll think about the curb appeal or the size of the unit. What you want to look at is the numbers. 

Numbers need to make sense. That’s first and foremost, as an investment. It truly comes down to do the numbers work. Don’t make the numbers work, meaning “You know what, I can see that there’ll be more read, or I’m not going to put the vacancy rate. I’m not going to put into property management.” That’s another major mistake I see people make, “I can manage it myself.” Yeah, you can manage one, two, or four properties. But if you’re going to do this more, then you have to make sure you budget for property management as well.

Robert Leonard  22:53  

I see people make that mistake, too. It’s not even so much if you scale. It’s just you get to a point where you don’t want to do it anymore. It’s not bad. You can set up systems. I don’t have a problem managing my properties, but if you have a problematic tenant or just a problematic property, just start something else. Maybe you start a different side hustle or a different venture. You get a new job, or whatever it is. Then you have less time to do that. You need to be able to offload that and still have a profitable property, no matter what the reason is.

Jas Takhar  23:18  

Someone on speed dial should be a paralegal, right? Just having to be prepared for lease agreements and finding tenants. I think that’s another major mistake that first time investors make is as a landlord, they don’t treat their tenants like customers. 

I’m a big proponent of “treat your tenants very, very well,” on a bare minimum. If you just look at how much of a principal they’re paying down, and it’s a minimum of $8,000 to $9,000 a year. That’s just the principal that they’re paying. Forget how much the value went up and forget the cash flow for a second. Just a black and white number that you can google amortization schedule. 

Robert, if I was giving you that amount a year, every single year, be a little nice to me. I mean, we don’t all celebrate the holidays, but all of us kind of celebrate holiday season. An $8-12 bottle of wine goes a long way. “Thanks, Robert, the tenant for paying the rent this year or this month. If there’s anything you need, here’s my direct number. Call me and let me know.” 

It’s like walking into Walmart. If the greeter told you to half off as you walked in, you’ll wonder what is going on in the store, right? Just treating your customers well. 

Also make sure that you budget, as I mentioned, for vacancies, but even repairs and maintenance. Just budget for it and treat it like a business right? Like if Walmart has internal theft and external theft. 

When they look at their numbers at the end of the week or the month whatever they do, they don’t shut down the store because there was some theft. They understand it, they budget for it. They try their best to have scanners and all that kind of stuff for things not to get stolen, but stuff still happens. 

In real estate, it’s no different. Something’s going to happen to a tenant in their own life, like the pandemic, you know what I mean? That stuff happens and budget for it so you’re not losing sleep at night. If you know that there might be some vacancy, you might need to paint. You might need to send in a cleaner. When it does happen, you already budgeted for it. It’s okay. Move on to the next one.

Robert Leonard  25:15  

I really like budgeting for all the cost. I think that’s super important but I really like the component of having good customer service as a landlord. I think a lot of real estate investors forget that because they only study real estate… If you read real estate books, not a lot of real estate books really talk about that. It’s not that common to talk about in the real estate space. But if you study business and which I do, I will study a lot about business… It can help you build your real estate business. 

If you read Zappos, the book about Zappos, or even Jeff Bezos, and how they’re just so customer centric, and how customer focused they are, you start to get these ideas and you say, “Well, I can implement this in my real estate business.”

For me, I know that it costs roughly $1500 to $2,000, to turn over a unit if a tenant leaves. That’s a component that people don’t even think of and that’s expensive.  

This year, one of our new tenants moved in. They were a newlywed couple. They just got married. They had pets. So we knew they love their pets and we knew they were newly married. We spent 200 bucks on them. We sent them a gift card. We said, “You’re new to the *inaudible*. You just moved to the area from out of state. Here go have a great dinner on us.” It was like a $100 gift card, go enjoy it. Then we also sent them toys for their pets and a little bit of other stuff for their pets. They loved it and it was 200 bucks. 

If you look on a P&L, that hurt our profitability a little bit, but you know what? It helped the long term relationship. I think if you continue to do that in your business, the downside or the loss of profitability is absolutely going to be outweighed in the long term.

Jas Takhar  26:36  

I definitely will be because I’m sure that if the next door neighbor’s place comes up for rent, they’re going to say, “I’m not leaving. I don’t care if we pay Robert $25 more a month, but we have a relationship with the guy. I don’t want to leave.” 

Those are actual true conversations that happened. Then a lot of landlords will say, talk about horror stories in the 15 years that I’ve been doing this, I’ve heard like five horror stories. Thousands upon thousands of success stories and five horror stories. 

Most of the time, it was the landlord’s fault to begin with. Why? Because they have this mindset of, “I’m the landlord and Robert is the tenant. You’re beneath me, because you’re a tenant.” But it’s the other way around. It should be, “Robert, what can I do for you? How can I be of service to you?”

Robert Leonard  27:21  

I mean, the truth of the matter is, they’ll probably treat your property better. If you have a human connection with them, they’re going to treat your property better. If you treat them like crap, they’re going to say, “Oh, the dog can go pee on the wall or on the carpet or whatever.”

Jas Takhar  27:33  

Exactly. “Who gives a crap? I don’t like Robert anyways. He doesn’t treat me well.” 

Then you’ll have landlords that don’t show up. Don’t be a *inaudible* to your tenant showing up every week just to check up on the place. You can go once every month and do it old school. Don’t do any transfer. Don’t take 12 post dated checks. You can come by and collect the checks. Be old school like that. 

I’m going to come by once a month and ask, “How are you doing, Robert? I was looking around the place. Did you need anything for me this month, Robert? No. Awesome. Thank you.” 

If you lend me your car, Robert, now you probably would call me every hour of the hour. *inaudible* checking and making sure that you have the car. However, if you rent out your place and never check up on it then go there seven months later, you’re surprised that there is a *inaudible* at the back. You might have just wanted to check up on the guy maybe once a month. If it’s too much for you, maybe once every two months you should be checking up on your place. 

For sure, it’s your right to check. Like I said more than that but then you might be crossing that line and just pestering them.

Robert Leonard  28:30  

What are some of the mistakes that you’ve made, Jas, in your real estate investing business?

Jas Takhar  28:35  

I don’t buy any properties that I sold. It’s the biggest mistake ever because last year in the Greater Toronto Area, on average properties doubled every single year. 

The first property that I bought, I sold it just because I saw a profit or a sticker tag on it that it was going for five years later. It now would be worth two and a half times more than that if I just kept it. I could have refinanced it more. *inaudible*, my company’s slogan for REC Canada is “I’m glad I did.” 

The reason is because we are only here five times or ten times a day. “I wish I had kept it,” it’s what I said to myself. 

The second thing is that I didn’t do it sooner. This is not for anybody. I don’t want to hear anybody. I don’t want anybody to hear it like I’m trying to rush anyone. It’s not my style. It’s just that the sooner you get into the market and investing in real estate, the sooner you’ll start to see returns. You’ll see the best returns which are compounding.

See when you buy something for $500,000 and it appreciates by 5%, that’s $525,000 in year one, but in year two, that’s 5% of a 525. Albert Einstein said the best invention in the world was compound interest. There’s a reason for it.  

I think my two biggest mistakes is I sold a property which I never should have, because I didn’t need to. I got greedy. I saw the money and all I really did is I spent some of it to pay off debt and then I bought more real estate with it. I couldn’t just help it, not pay more closing costs. The second is not doing it sooner.

Robert Leonard  30:05  

How is investing in Canada different than investing in the US?

Jas Takhar  30:10  

First and foremost, you guys want, like in the States, anybody who’s listening right now, you’ll have what’s called foreclosures. We have a term that we use here called power of sales. Similar, but some major, major differences and the biggest difference is in Canada, with a power of sale, the lender who the mortgage is with, they have to try and prove that they’ve sold the property for market value. 

They can’t just sell it for what they have in it. They have to prove that they sold it for… that they tried to sell it for market value. You can’t come in and get a property as low as you can on the stateside with lenders on the stateside.

If they have a $200,000 mortgage on it, they’re going to try to recoup the $200,000 as well as the legal fees, even though the market value is $400,000. There’s a lot more built-in equity. That’s one of the biggest, in my opinion, differences. We just don’t see a lot of power sales either in Canada.

Our banking system here is ultra-conservative. I hate to say it, but back in 2008 and 2009 in the stateside, essentially, if you could walk, talk and chew gum at the same time, you’re getting 110% financing. You need a TV and you need a new deck? Why don’t you get financing on that. People are getting financing.

Here in Canada, it’s why we were able to protect and why were we able to protect our economy and enter real estate values, we have like a five or six-month deadline, because anytime the State sees, we get a pullback. It is just how it works in both economies.

Back in 2008 and 2009 though, we had a little bit of a dip, but we got right back up again because our banking system was so conservative. You can have a good job and your tenure there could be very long. You could have a great downpayment, fantastic credit. They put you through the wringer to get financing and to get mortgages. It’s a little tougher on the Canadian side from a financing perspective. 

Overall, what I love about real estate investing, Robert, is that the fundamentals are identically and pretty much the same. What I mean by that is buy a property and hold on to it, rent it out, let the tenant pay down your mortgage, treat the tenant well, they’ll pay down your mortgage. Then hopefully you have a minimum enough to weigh your income. Your rental income covers your expenses. Let the values go up. Everything in between, there’s called equity, and you refinance the equity and buy more. 

You can do that on the State side, you can do that in Canada, you can do that anywhere around the world, as long as you buy in good areas where there’s population growth, there’s a lot of job opportunities… To me, the number one thing I look for is buying and investing around transit. When I look at world real estate, values increase the most and the rentability of properties is the highest in and around transit. 

Robert Leonard  33:02  

One of the other most common questions that kind of goes along with what we just talked about is how can international folks invest in the US? Being from Canada, what ways have you seen international investors start to invest in the US?

Jas Takhar  33:15  

We used to do a lot of investing with our clients in Florida, especially after the 2008-2009 crash, because two of our major banks went into the States, one being TD Canada Trust, as well as a Scotia Bank. That made it a little easier. 

However, we still needed to put down a minimum. We were getting away with 35% down. Now it’s gone to a point where you need to buy with cash. You can get a line of credit but it is still very tough. Though I’m noticing most Canadians investing into Canada still.

One of the main reasons is because we are very conservative in Canada. Maybe it’s one of the reasons we say sorry all the time. We’re just very conservative. We like to invest in what we know. 

The population growth, specifically in the Greater Toronto Area, is close to 250,000 people year after year. To house those 250,000 people, we need about 55 to 60,000 households. On a good year, we’re only doing about 37,000. We have a major supply and demand issue here. As an investor, it’s fantastic. Not good for first-time homebuyers. 

Once you have a lot of demand and very little supply, the values go up. That’s just basic economics. So not good for first-time homebuyers but fantastic for investors, because as an investor you know value is going to keep on increasing but you know the population is coming in so you’re always gonna have a steady flow of tenants. 

Robert Leonard  34:43  

A common piece of advice given by real estate influencer and investor Grant Cardone is that you should rent where you live. What do you think about this advice? Do you think it’s sound advice?

Jas Takhar  34:54  

I know I’ve heard Grant say that. I’ve watched a lot of wealthy people employ that strategy where they live, they rent. But I want to make sure everybody catches on to what someone like Grant, other influencers and other wealthy people do, they still invest into property and rent it out. 

There’s nothing wrong with renting where you own because your principal residence in all honesty is not an asset. It is a liability because it costs you money. It costs you utilities. Okay, if you fix a condo, there’s condo fees. There’s property tax. You can’t get away from that. Then just the maintenance of the property where you have to take care of the roof, the furnace, the windows. So I can see why a lot of wealthy people don’t want to have that liability attached to them.

I have a slightly different twist to it. I believe everyone should get into the market once. Be an owner of property of their principal residence where they live once. The reason is, is because I’ve yet to come across anything and stocks, you can do it, but I just find it with real estate, it happens more often. It happens a little quicker as well.

When you own the property and with passive appreciation, values are increasing, you can take advantage of that equity. As a renter, you can’t take advantage of that. I say get into it once because when that value increases, you can sell that property in Canada, legally. It will tax on selling your principal residence. You then can take that cash. 

If you bought something for 500,000, 10 years later it is worth a million dollars. Two years later, it’s worth $600,000. You sell it after all your costs and expenses, you’re left with $575,000. You take that $75,000, you now can use it to invest. You could have bought it with 5% down with $25,000. You can use that money to invest into other real estate income properties and then start to rent. But overall, there is nothing wrong with renting where you live. 

Robert Leonard  37:04  

Jas, thanks so much for coming on the show and providing your perspective on being an agent and investor and how non-residents might be able to invest in the US. For those listening to the show today and want to connect with you further. where’s the best place for them to go?

Jas Takhar  37:18  

Appreciate that, Robert, thank you for having me on, man. 

The easiest place to get a hold of me and to get to know me a little bit more is my website. It’s jastakhar.ca. You can order the book. It’s a one stop shop. Again, I do appreciate you having me on.

Robert Leonard  37:39  

I will be sure to put a link to his website in the show notes below. If you guys missed the spelling, feel free to click the show notes below in your favorite podcast player or at theinvestorspodcast.com. Go check out everything that Jas has going on. 

Jas, thanks so much. 

Jas Takhar  37:52  

Thanks again, Robert. 

Robert Leonard  37:54  

Alright guys, that’s all I had for this week’s episode of Real Estate Investing. I’ll see you again next week.

Outro 37:59  

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