29 Feb 2024
5 Important Tips To Know When Buying A Rental Property
Buying a property for investment can be financially rewarding if done the right way, even in a challenging real estate market.
Other elements that have to be considered for purchasing a rental property together with the down necessary payment – legal fees, land transfer taxes, insurance, a reserve fund for contingencies. If you plan to renovate, these costs have to be factored in as well.
Once the property is up and running, a cash flow projection must be generated to determine what kind of return you can expect.
Banks view investment into rental properties as higher risk, therefore the underwriting process or due diligence they perform will always be much more scrutinized, than an owner-occupied property. Therefore, it is important you have all your information well organized – e.g. where is your down payment coming from? how good your credit score/history is?
If you are focusing on cash flow, then a single-family dwelling with a long-term tenant will not be appropriate; this would work if you want to build equity.
Areas that have few vacant properties, located near amenities such as schools and shopping centres, with a high percentage of employment would be ideal. Purchasing a property far from your present location makes sense if you plan on working with a property management company.
A good way of finding qualified service professionals is by getting recommendations from fellow investors who are investing in the same market.
We have several excellent investment properties available for sale. Visit our website or, contact us to book a consultation.
- How much property can you afford?
Other elements that have to be considered for purchasing a rental property together with the down necessary payment – legal fees, land transfer taxes, insurance, a reserve fund for contingencies. If you plan to renovate, these costs have to be factored in as well.
Once the property is up and running, a cash flow projection must be generated to determine what kind of return you can expect.
- Get organized
Banks view investment into rental properties as higher risk, therefore the underwriting process or due diligence they perform will always be much more scrutinized, than an owner-occupied property. Therefore, it is important you have all your information well organized – e.g. where is your down payment coming from? how good your credit score/history is?
- Chose the right strategy
If you are focusing on cash flow, then a single-family dwelling with a long-term tenant will not be appropriate; this would work if you want to build equity.
- Choose a market
Areas that have few vacant properties, located near amenities such as schools and shopping centres, with a high percentage of employment would be ideal. Purchasing a property far from your present location makes sense if you plan on working with a property management company.
- Build a team
A good way of finding qualified service professionals is by getting recommendations from fellow investors who are investing in the same market.
We have several excellent investment properties available for sale. Visit our website or, contact us to book a consultation.