Ann Smith
Broker


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519.697.3544
519.433.4331
1.866.851.1534
Fax: 519.433.6894
Email: ansmith@sympatico.ca

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What to Consider Before Purchasing an Investment Property

By Ann Smith, Broker

Purchasing a property for investment purposes can be a great way to increased wealth. It may provide a nice nest egg for retirement down the road, but if you’re jumping in for the first time, there are many factors to consider. 

·             What’s your credit rating?

·             What can you afford?  You may be able to easily afford a student rental property but don’t forget to factor in the increased maintenance costs.

·             If you’re planning on managing the property yourself, buy it close to home.

·             How handy are you around your current home and what resources are available to you – and at what cost?  This includes everything from fixing holes in the walls and painting to major plumbing and electrical work.

·             View the property as if you were planning on living there...what changes or renovations will be required?

·             What bylaws exist in the neighbourhood regarding rental properties?

·             What building permits would be required?

·             Confirm all utility costs with the local utility offices (you’ll want that information to know whether you should include them in the rent).

·             Do you understand your rights as a landlord – and those of the tenants? (See the Landlord & Tenant Board site for details.)  And if the property is part of a condo complex or gated community, there will be a unique set of rules, regulations, and by-laws imposed that you should consider.

·             Will your current cash flow carry two homes if you don’t immediately find tenants? 

·             Do you have a minimum of 10% of the property value available to cover any unforeseen problems?  They will happen! 

Before you take the first step, know why you are looking at purchasing an investment property.  If it’s to fix up and flip, understand the current market conditions.  And if it’s to be included as part of your retirement plan, purchasing a property in an area that is just becoming trendy may pay off well down the road.  But it could also backfire.  Talk to a reputable Realtor who knows the in’s and out’s of investment properties.

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Ann Smith, Broker
Your Real Estate Consultant…For Life!