Is it Time for a Rental Property Purchase?

Is it Time for a Rental Property Purchase?

Have you heard the expression – Buy Low, Sell High? This quote often refers to trading on the stock market but can also be applied to real estate with the fluctuations in the market. As the real estate market continues to report lower year-over-year prices, it could be the time to strike if a rental property is on your wish list. With the rising interest rates making qualifying for a mortgage difficult for some, the rental market in the GTA is, once again, in demand.

Pros and Cons of Owning a Rental Property

Like anything, there are pros and cons to owning a rental property. The pros are a boost to the property owner’s portfolio and an increase in net worth. Real estate is historically an appreciating asset and, therefore, a wise investment if the buyer has the means to support it.
There are also tax advantages and write-offs to owning a rental property, such as mortgage interest, utilities, repairs, and some professional services. The cons, if you see it as such, is the property owner is ultimately responsible for the mortgage, taxes, and utility payments if the tenant fails to pay. To this point, verifying financial qualifications and references will go a long way when selecting a tenant.

Preparing for the Mortgage Application

This is always a big question! Like your primary residence, you must go through a mortgage approval process. The good news – at Gail Sylvester Mortgages, we work with many lenders who have helped our clients achieve this dream! What will help you qualify, among other documents:

• A 20% down payment (for most lenders)
• Current Rental agreement (if it exists)
• Current record of employment and additional financial documents as requested

First Things First

As always, we recommend speaking to a mortgage professional to ensure you understand all the ins and outs of the process and what is required post-purchase. At Gail Sylvester Mortgages, we not only work with clients who own multiple properties, but we are also landlords ourselves, so we understand firsthand what it’s all about! We would love to help you prepare for this purchase by walking you through all the steps. Let’s get started today!

Visit our YouTube Channel to watch a video on purchasing a second property here.

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