Owning your first rental property can be exciting. Owning a second residence that you rent out is only the beginning; however, many people don’t realize that it’s possible to buy their first investment property in Canada with as little as 20% down and even purchase a duplex, triplex, or four-plex.

After doing your research and getting the facts, you may be asking yourself the following questions:

1. Where do I get the money for my down payment?

The answer is that it’s pretty simple, you need to do two things; save and ask for help. You can save up your own money, or you can go the route of getting a gift (perhaps from your family) to use as a down payment. There are also other options such as; getting a grant or using another small property you own to secure financing.

2. Where will I get the money for all my investment property expenses?

When it comes to taking care of the necessities, there are two main options for what type of financing you should consider. If you are cash-strapped or have little credit, one option is to take out a loan to cover the expenses until the property starts earning income. You may consider taking out a loan to help with overhead for those with good credit. It’s best to save up money for expenses until the rent coming in covers these costs.

3. What type of property am I looking for, and where should it be located?

Property type and location are big questions to consider, especially if you are new to investing in real estate. There are different types of rental investment properties such as; apartments, houses or townhouses. Each has its pros and cons depending on location (central vs. suburbs, for example) and how much money you have to invest.

4. What type of financing do I need for my first rental property?

There are different options for getting a loan, so knowing which one is best will depend on your specific situation. Common types of loans include first and second mortgages, HELOCs and personal loans.

5. How long do I have to hold the investment property?

Before you purchase, you should know how long you must own the property to get your money back when selling it. In addition, if someone doesn’t want to be a landlord or deal with tenants, they can always sell it before the holding period is over.

In addition, it’s essential to keep in mind that different factors influence the return on investment when it comes to rental properties, such as; whether you manage them yourself or use a professional management company and hire a property manager.

Now that you have the basic information down, it’s time to consider how this will play into your plans to own a rental investment property in Canada. If you are still unsure, speak with an expert financial advisor who can help walk you through the specifics of what type of financing you should consider, the costs that come with each option and what kind of property to purchase.

By taking the time to consider these things now, you can make sure that you are on track to purchase your first rental investment property without sacrificing too much of your current lifestyle.  Looking for a few more tips?  Check out this great article for some additional considerations and ideas before getting started.

If you have any other questions or would like to inquire about your suitability for this solution, we would be happy to help. Please contact us at (905) 351-8440 or info@thethemortgageguyniagara.com and we can review your options!  For our undivided attention, you can also book a call by booking a consultation below.

Book A Consultation