You have most likely heard that investment properties are a great financial strategy.
Why invest in real estate?
- Great ROI - Return on Investment! Residential real estate is a solid estate investment, typically appreciating faster than inflation.
- Retirement and pension plan solution. An investment property or multiple real estate holdings can make a great source of income or be an excellent addition to any wealth management portfolio.
- Many Canadian families are sending their kids to university or college. A property investment specifically for this purpose can be a better alternative to student residence.
- First time home buyers may benefit from a duplex or triplex purchase. This can be a great way to get into home-ownership. For first time home buyers, a duplex or triplex could be a terrific way to get into home-ownership. Rental income from the extra units can offset the cost of the mortgage, giving you earlier access to your first home.
- Dramatically increase the value of a second home. Improve a diamond-in-the-rough by using your home improvement skills and talents.
There are a few different rules and regulations surrounding Investment Property Mortgages, and it would be wise to know the ins and out before jumping in! A few of these regulations include:
- A higher down payment is required - no less than 20% for an insured lender.
- Less than 20% down payment will incur higher interest rate with an uninsured lender.
- Once you have more than 4 properties, you will need to spread your mortgages across several lenders to avoid reaching a maximum number of mortgages per investor that a lender will approve.
- Different treatment for rental income in debt service calculations
If any of this sounds confusing - do not fear! One of our experienced mortgage agents would be happy to help you navigate the territory of owning your first investment property. There's no cost or obligation, and we're up to date on rates and opportunities within the marketplace. We can offer general advice or help you look at options for an investment property mortgage. Contact us today!