At Avi Urban, we work with experts to get you the details on all aspects of homeownership, from mortgage negotiations to purchasing your first investment property.
One of these experts is Laura Parsons, BMO Area Manager of Mortgage Specialists, who is a great resource to help get you started on the path to being a landlord. Here are some of the basics of owning an investment property:
In my opinion Calgary is still a great place to invest in real estate and another form of planning for retirement or assisting your children with an early inheritance.
I have a child in the final year of her education and I really think the best support we provided her was that she could rent from us. We actually chose the neighbourhood as it was close to transit and if needed she could walk to SAIT. Our first best decision was not to have her rent from someone else so when we had to step in and help her with rent, at least it was going to us. When her car broke down there was not the usual panic, as she could still make her way easily to college.
We have renters in the suite below who help subsidize the overall mortgage payment. Our daughter acts like a landlord in that she collects the rent, maintains the property and checks in with our renter on occasion. It’s a win for everyone, were building equity, supporting our daughter and have an onsite manager which makes it easy for my husband and I.
Consider a condo: You may not want to purchase a home with a suite as it may not fit within your plans or your budget, so a condo which can be more affordable might be a fit. With an abundance of condos on the market in some great locations it is not a bad thought to consider diversifying your investments and purchasing a condo, whether you have a child that is a student or not.
Your first step: Meet with a Mortgage Specialist and review your options and make sure first that you can afford to carry another property. If you have a vacancy you will have to cover the mortgage payments and you don’t want to be in a position you have to sell in a buyers market.
Think long term: This is not a short term investment but a long term plan, so it is imperative your budget can afford any obstacles along the way. Some obstacles to consider are repairs and maintenance, vacancy, advertising and of course your time.
Talk to the experts: You should also speak with an accountant so you fully understand what tax benefits are available and any tax implications of owning a rental property. Speak with your insurance agent to ensure you get the necessary insurance to protect both the property and you.
Be the landlord: Most importantly understand what it means to be a landlord and what rights your tenants have.
Do your homework- work with experts to make an informed decision.
Questions for Laura? Send her a note at email@example.com or visit bmo.ca to find your local mobile mortgage specialist.