For an increasing number of people owning a rental property has become a key component of their investment portfolio. Year-over-year gains in capital appreciation and using the rental income to pay off the mortgage leads to substantial gains in equity in a short period of time. Yet another argument for buying a rental property in Oakville is favourable long-term demand dynamics. With rental property, like all other types of real estate, location is key. This is not a get rich quick scheme and like any other type of investment owning a rental property comes with a degree of risk. Once you have purchased the rental property manage that risk with comprehensive leasing strategies and sound tenant management.
The most common mistake people make is commencing their search prior to arranging financing. The criteria Banks and lenders have for financing rental property differs from what most people are familiar with, financing for purchasing their current home. Many hopes have been dashed when buyers find out they can’t afford what they want to buy.
What type of investment property are you looking for?
Condominium apartments, town homes, detached houses and all things in between.
How much are you comfortable spending?
For some, the financing amount being received from their Bank exceeds their own personal comfort level for borrowing.
What are the average rents in a neighbourhood?
Every neighbourhood will have a price floor and price ceiling for rents, just as they do for sale prices based on the strength of demand for the area and the product offering.
What is the Overall Supply of Existing Rental Property?
In my opinion, one of the most important variables yet the most commonly overlooked. Most tend to focus on ‘demand’ while ignoring the supply side of the equation. There are neighbourhoods in every community already completely saturated with rental property.
Are You Done Your Homework?
Who do you want your tenants to be?
The property must have the ability to attract these individuals you strive to have as tenants. To illustrate, if you want retirees to be your target market then you shouldn’t buy a 3 storey town home.
Why Not Leverage the Services of a Professional?
I would highly recommend using an agent that has a lot of experience with rental properties. You would not hire a financial consultant that is not extremely knowledgeable about the financial markets; real estate should be no different. Buying through someone who has this experience and skill set will save you from making costly mistakes.
20 years experience assisting clients by rental properties. Today, rental properties come in all shapes and sizes depending on the outlook of my client and budget. Rents range from $1200 per month all the way up to $12,000 per month.