Making money in the Canadian real estate market is not an easy task. Yet, many have tried and succeeded. All you need to is to devise a strategy you would follow.
Here are a few things you need to focus on if you have decided on entering the real estate arena:
Acquiring a mortgage for more than one property is a tedious task. Few questions are asked when you consider mortgage financing for your primary property. While if you do the same for a secondary property, things are different.
While getting a mortgage for your secondary residential property, you must pay 20% of the amount as the down payment. Moreover, only a specific portion of your earnings from the rent of that property can pay down a mortgage.
Down payments of as much as 50% have to be made while getting a mortgage for secondary commercial properties.
In all parts of Canada, any amount collected in form of rent from a property is income and becomes eligible to be taxed accordingly.
Capital gains taxes are also implied on your property as its overall value increases from the time of purchase till the time you decide to sell it.
Before you invest in real estate, learn as much as you can about the tax implications.
Expecting profits in short periods of time involves a lot of risk for the property business. Therefore, it is considered safer if your investment has a long-term goal to it.
The real estate market can be unpredictable, and you should give your investment some time to grow.
Cash Flow — One major goal while investing in real estate should be regulation of cash. Cash flow is the sum that goes into your pocket after collecting the rent and paying out all expenses.
The percentage of down payment and the nature of your mortgage also affect the cash flow.
Appreciation — Appreciation is the overall profit you make on the sale of your property. Selling an investment for more than what you paid for it is called appreciation.
Buying an apartment for $600,000 and selling it for $900,000 would involve $300,000 as the appreciation amount.
Equity — Equity is developed when your mortgage is paid by a third party i.e. the tenant who you’ve rented out the property to.
The mortgage can be paid by the tenant for as long as it is required and in the end, you’ll be left with a mortgage-free investment.
If you need a real estate agent, they will always tell you the best things. It is expected, and there is nothing wrong with that. It is a skill they have that will help you sell your house. The important thing is that they can do what they are supposed to do and that is to get you the sale. Of course, we want to know what is going on up on a real estate agent’s sleeves. Let me tell you some facts that no real estate agent will tell you.
1. I advertise your properties to market myself
Of course, real estate agents will do their job. They promised you that they would sell your property on different platforms so they can easily get a buyer. The fact about it is, the more they advertise your property, the more exposure they can get.
2. My commission can be lowered down
Real estate agents will provide you a definite plan when it comes to selling your house. There will be a fixed percentage of the commission, but the fact about that is it can change. You can haggle your way around with the commission of the agent. You should assess your property, and if you think it is easy to sell, you should negotiate the commission percentage. Remember that you have the edge because if you won’t get them, there is no commission.
3. I’m not familiar with the area that you’re interested in.
Real estate agents will always tell you that they have a good connection in any area you mention. Having information around the area doesn’t mean that they are knowledgeable about how it works in the neighborhood. It is always best if you can check the reference of the agents to make sure you can get a good one.
Real estate agents may not say all these things, but one thing is sure, they will always do whatever they can to get the sale for you. Their money will be based on the sale so you can be assured that they want to get the sale as you do.
Renting a home is the best option if you don’t want to be tied up on the place for a long time. It is the option that people choose if their job requires a lot of relocation or if you are someone who has other priorities in mind. If you’re thinking about leasing a place then here are some important tips that you need to know.
1. Research the place
You should take time in checking out the place where you’re planning to rent a home. It is important that you can get the best out of it. You have to consider the location of the place if it’s near your job, transportation services, things you need are just around the corner, and the price that you have to pay.
2. Don’t Speed up your viewing
If you are looking for a home that you can rent, surely you will visit each property. Don’t do your viewing in a rush. You have to be certain that you have inspected the area thoroughly. If you spend time when you’re doing an ocular, then you can feel the vibe of the place. Your guts will give you an idea if you fit in the place or not.
3. Negotiate the price
You will be the one to spend for the rental, so you have the edge over the landlord. Give an asking price lower than what he is expecting. Remember that you are not the one who is trying to fill the properties. If the landlord has no tenants, then he is out of profit.
4. Be straightforward
If you have noticed a problem on the property, immediately inform the owner. You don’t want the things that are broken before your arrival be charged to you. It is important that you inspect the place with the landlord to make sure he or she can also see the problem first-hand.
Just follow the tips, and I’m sure you won’t have a problem in finding the right home to rent.
Radio/Article segment by Kelowna Real Estate Agent, Annette Denk
People are often skeptical when it comes to investing their money into properties. Most of us think that it is not a good deal. Let me show you why I think otherwise. There are a lot of reasons why we should consider investing our money in real estate. Check out the ideas below, and I doubt if you won’t think about investing after you’re done.
1. Easy financing
Compared to setting up a business, lending companies are easier to give in when it comes to properties. They can see the value of properties in an instant. If you apply for a loan, these companies will have the property loan request granted faster than business loans.
2. You are in control
You are the boss of your properties. You don’t need to hire any people to work for you like with trades that you need a broker. You can raise the bar for the rent or lower it down as you please.
3. The power to upgrade
It doesn’t matter if you just acquired a big property. You can easily upgrade it to a building that has several divisions. You can create more space and generate more income.
4. Continuous cash flow
The beauty of having a property is that you are assured to have a regular cash flow without doing anything. You purchase the property and tenants will pay you money for years.
5. You can pass it on
You are not the only one who will get the benefits from the properties. You are assured to get rental payments even if you are old. Afterward, you can also provide the same comfort to your children.
Investment is something that we have to think carefully. Look on the bright side of the situation. All of us need shelter, but not everyone can afford to buy a house easily. People tend to pay rents until they can get a house of their own. Take advantage of that, and you can get wealthier every day.