The decision to purchase your first rental property is seldom a simple one.
These 5 essentials to consider when purchasing a Rental Property
What's the expected revenue from your rental property?
Let's say that you're taking a look at a duplex for $200,000. Through your market research as well as the particulars you obtained from your appraiser, you have determined that the present market rents for your region are X. Next you should have received a pro-forma associated with expense for the building including the mortgage, insurance coverage estimate, property tax amount, utilities (in case the renter isn't paying them) and the property management expenditures.
Select a neighborhood with lower vacancy rates compared to the rest of the city.
It's best if you seek to invest in a rental home inside a strong community. There are a number of elements causing this; one is that you'll be considering a greater rental payment, and the vacancy rates usually are lower
Take your time in choosing a qualified tenant.
The right tenant will decrease the risks and minimize expenses.
Since you will be involved ensuring a home is completely leased out when you take control of, the best thing that can be done is purchase a unit that's move-in ready.
Purchase low and sell HIGH - constantly be on the look out for properties that are listed under the current market price.
Low sale price does not always mean low value or even low rents
How do you find these types of deals? Ask. Ask every person you know. Take time to get acquainted with the location you are looking for.
Be on the lookout for pre-foreclosures, foreclosures, as well as homes that have been on the market for a year.
Try out our handy mortgage calculator Canada that can assist you calculate payment choices, schedule of payments and much more.