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5 Things To Know While Buying Investment Property in Canada
If you have plans of buying an investment property in Canada you may be aware it can help you make a handsome amount of extra money. You may be aware of investment property mortgages and also that while all seems good on paper, the reality is slightly different. There are a lot of things you need to take into consideration before buying the investment property. Here, we list down the five things you must keep in mind while buying such a property: Do not lean towards the fixer-upper A fixer-upper property is always lucrative on paper because of its low price tag. We recommend you do not give in to this temptation before thoroughly judging the nature of repairs needed. Such a purchase will reap benefits only if you have prior experience in home repairs and renovations and have plenty of help at hand. If not, you will be spending a lot more money than you actually save by buying the low price tag fixer-upper property. Invest wisely! Consider the location If this is your first rental property let us share a handy tip - location is something you must focus on. Pick an area which has a low crime rate. Access to schools, metro stations, grocery stores and other important places is an important factor to consider as those looking to rent the property consider all these factors before signing a contract. This doesn't mean you pick an expensive neighbourhood to invest in. It should mostly be affordable with all required amenities in vicinity. Take maintenance into account If you already own a property, you may know all properties need maintenance. As a landlord you are responsible for all sorts of repairs a property may need such as wiring, roofs, heating and so on. You must save up for any repairs or damages that may hit you all of a sudden. If you are relying on this income to pay for your other mortgages you must also save up for a rainy day in case your tenant fails to make a rent payment for a certain month due to a sudden job loss, ill health or other such unforeseen factors. Know the law Though it is lucrative to have money coming your way from an investment property, you must also know about the laws relating to tenants, property maintenance and evictions. This is so that you are aware of the legal obligations you have towards your tenant and that you are following them so you don't fall prey to any legal trouble. Reporting rental income One thing that many newly minted landlords tend to realize late is that when it is time to pay your taxes it is necessary to report any income that you may earn from rentals. Likewise, you also need to report losses, if any. Using the services of an accountant comes in handy while filing your taxes. If you are looking to buy an investment property and have any doubts or concerns do not hesitate to contact LendX Financial in Brampton.