Buying an Investment Property in Toronto
Tuesday Jun 06th, 2023
Did you know that 1 in 4 Canadians plan to purchase an investment property in the next five years? Are you one of them? Here are some things you should know before deciding whether purchasing an investment property is right for you and how to make it happen if it is.
Why invest in a residential property?
✔️Long term value appreciation
✔️Positive cash flow
✔️Low maintenance costs
Did you know…
➡️The earlier you start investing in real estate the more likely you are to purchase an investment property in the future.
➡️The most popular type of investment property is a single-family detached home with townhomes close behind.
➡️44% of current investors own properties in the city or town that they live in with post-secondary institutions being a major factor in their decision making process.
➡️15% of residential investors in Canada don’t own their primary residence.
➡️24-28% of residential investors in Toronto say they are likely to sell one or more of their residential properties in the next two years.
Keep in mind
When making any investment, it’s all about the math. Somethings you need to consider:
You will probably need a 20% down payment.
Lenders may not consider income from an “illegal apartment” when deciding on whether or not you qualify for a mortgage.
Lenders will also consider a large portion of the rental income when deciding on the size of your mortgage.
Costs to consider when deciding what your monthly cash flow will be. Cash flow is the rent minus the expenses.
💰Monthly mortgage payments
💰Condo fees/property taxes
Income properties are taxed differently than principal residences
🤔Real estate investments come with their own set of potential risks that you have to consider, as you do with any type of investment. It is important to seek the advice of experts including financial advisors, mortgage brokers and real estate agents to ensure that you are making the right choices for your particular needs and goals.
🤔If you buy a property with the main intention of selling it, you will owe tax on any resulting gain (or profit)when you sell that property. The gain on the sale of real estate is the difference between what the property is sold for and its cost. In some situations this is considered business income; in other situations it is considered to be a capital gain.
For more details please visit the Canada.ca “effects of buying real estate sell for profit page”
As with any investment it’s important to know all the facts, and to work with experts so that you make a decision that works best for your particular situation. If you have any questions please feel free to get in touch.
This information should not be relied on as legal advice, financial advice, or a definitive statement of the law in any jurisdiction. For such advice, please consult your own legal counsel, financial representative, and/or insurance representative…