Tips for Buying Your First Investment Property
By Sarah Velasquez | February 2022
With house prices on the rise, the demand for rental properties is higher than ever. Investing in your first rental property can bring you lucrative returns, but it’s important to take the right steps along the way to make a smart investment.
Home Buying Process
If you’re planning on purchasing a property outright, you have fewer hoops to jump through than someone pursuing a mortgage. If you require a mortgage for your first investment property, you should find out how much you’re pre-approved for to avoid wasting time before you start your search.
If you require a loan, you’ll either need a fixed rate or an adjustable mortgage. This is where a strong credit score comes into play as it can dictate how much of a deposit is required on the property.
Once you’ve organized how you’re going to finance your first investment property, it’s time for the buying process. If you’d like to save as much money as possible on the purchase, consider buying the property as-is. This, however, doesn’t mean compromising on essential steps before buying the property, such as consulting with a lawyer, carrying out surveys, and examining land and water records for any causes of concern (especially in rural areas). The last thing you want is to be riddled with expensive surprises after purchasing your property.
Choosing a Profitable Property
Once you know how much money you can spend, choose a property that will make you money. While purchasing a fixer-upper can be tempting, it’s important to avoid homes that need costly repairs, such as a plumbing overhaul, foundation work, or a new roof. A house that just needs painting and a new kitchen is very different from a house with an outdated plumbing or electrical system.
You also want to keep in mind the location of the property. When buying a property in Toronto, for example, location is everything. Try to find a property in a sought-after area such as Runnymede-Bloor West Village, North Riverdale, or Mount Pleasant East. These areas are close to local amenities, have low crime rates, and are near excellent schools. People will pay more to live in a thriving area that is safe for their families.
Managing the Property
Once you’ve purchased your first investment property, decide how it’s going to be managed. While having a property management company run your property can be an additional expense, it’s a great option for landlords to have peace of mind when it comes to repairs and difficult tenants.
You can also choose to manage the property yourself, but be aware that this comes with a significant amount of responsibility. If a boiler breaks, tenants don’t pay on time, or the plumbing needs urgent attention, that’s all on you to sort out.
Start Earning Extra Income Today
Buying your first investment property is a great way to enhance your assets and earn extra income. Get in touch with Donna Bulika today and make the leap to property investment.
Please contact Broker Donna Bulika for advice on purchasing real estate in Toronto and to book your private consultation by filling the form below or calling/texting at 416-797-6226, or email firstname.lastname@example.org
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