When Diane Leahy decided to become a do-it-yourself investor, she looked for a winning strategy and found that there's no place like home.
"We became landlords in 1993, starting with our personal residence," says Ms. Leahy, an airline service director who lives with her paramedic husband, Mark Halden, and their two teenaged sons in Toronto.
"I'm probably the poster child for property investors."
For more than two decades, Ms. Leahy has followed a sometimes risky but lucrative self-investment strategy, buying, selling and managing residential properties in Ontario and Western Canada. She and her husband started by taking in a tenant at their first home in Toronto.
"Our first experience was a nightmare," she says. Undaunted, Ms. Leahy kept trying, while her husband concentrated on his paramedic work.
Right now Ms. Leahy holds four residential properties, or "doors" as she calls them, in Edmonton, Fort McMurray, Alta., Orillia, Ont., and Cornwall, Ont. "We invest in cash flowing properties based on economic fundamentals," she says.
The fundamentals that matter most to her are mortgage interest rates, cities or towns where average incomes are going up, communities that are growing and where there is strong demand for housing. (The Cornwall property is an exception, though it also has been a good investment, she says.)
As a do-it-yourself investor, Ms. Leahy says she has always preferred residential property to securities. "Real estate is a tangible asset that creates wealth and allows me to sleep at night. Some say it's not liquid enough, but I say: How liquid were your stocks or mutual funds during the crash [in 2008]?"
But DIY real estate is not easy. While it can bring a steady payoff, becoming a professional property owner requires patience and a strong understanding of both economic trends and property markets, Ms. Leahy warns. "I create strategies to achieve my goals," she says.
"Regardless of your level of knowledge when entering this asset class you must get educated." Ms. Leahy started by reading a book; then she joined an organization called the Real Estate Investment Network (REIN), whose members are like-minded aspiring property investors.
Real estate can indeed be fertile territory for the DIYer, but it needs to be approached with a healthy attitude and an understanding that the profits may not come quickly, agrees Ben Myers, senior vice-president of market research and analytics for Fortress Real Developments in Richmond Hill, Ont.
"The key for investors is to look at investing over the long term," says Mr. Myers, who lectures at REIN events. "They should not be paying attention to the short-term fluctuations in prices; they should look at longer-term price trends."
Mr. Myers has just released Fortress's mid-year analysis of the Canadian housing market. Prospective investors should pay less attention to nationwide market trends and more to what is happening in particular regions, he says.
"Residential real estate is primarily shaped by local market conditions at a Census Metropolitan Area (CMA) or regional level, with the biggest influencers being employment and immigration levels," his new report says. It's the same view that Ms. Leahy has taken since she started investing in properties.
Housing starts, while up this year, are still below the 10-year and 50-year averages.
"If you're investing for the long term, your property is going to go up. For every one of the major markets that I looked at, properties are going up," he says.
Ms. Leahy says she often looks at how a neighbourhood is changing. For example, she will look to see whether better transit is planned for an area, or whether there are good public schools – the latter a sign that young families may be seeking homes.
"Our intent was always to look five years ahead at an area," she says.
After stumbling on a book about real estate investing by REIN founding partner Don R. Campbell in 2007, Ms. Leahy says she quickly became hooked and joined the organization, whose fee-paying members can get online advice, access to experts and learning forums.
She says it took her about seven months to learn the fundamentals of real estate investing.
Her first investment goal was to earn enough money to be able to "de-triplex" the family home in Toronto's High Park neighbourhood, turning it into a single-family home. She achieved this, partly by acting as her own general contractor (after taking yet another course in how to do this).
Her biggest tips: Study how real estate investing works before you get started, and learn how economic fundamentals work – interest rates, the employment outlook, property taxes and so on.
Set a goal – understand why you want to invest in property. Build your strategy around this goal and stick to it.
"I didn't buy these properties to create generational wealth, I bought to raise capital and be mortgage free," she says.