If you want to invest in rental real estate, you are spoiled for choice. But before buying to rent, it is worth thinking about what you will do with your investment. You can visit https://www.for-sale.com for more information about properties for sale. Here are the questions to ask yourself and knowledgeable answers according to your situation.
To improve my future retirement
If the purpose of your rental investment is to get a pension supplement, it’s all about timing. You will actually buy to rent so that the rents cover a portion of the monthly mortgage loan. This implies that the loan must be fully repaid as you approach your retirement.
To house my children during their studies
If the object of the investment is to provide housing for children during their studies, there is a tendency to buy student housing to rent it. The idea is to retrieve it later for one’s own children.
To place a capital/investment in housing
If you want to buy an apartment to rent because you have a capital, you will of course seek a property corresponding to your budget. Remember to target homes 10% cheaper than the sum you have. And yes, you will also have to count with notary fees.
Will I rent it by myself?
Yes, I do not mind managing the rental
The classic real estate investment as everyone knows it, is the simple purchase – rental. An individual buys an apartment, looks for tenants, selects them, drafts the contract and collects rents.
I prefer to entrust the hiring to a professional
The simplest solution for those who do not wish to manage the rental, is to entrust the apartment to a real estate agency. This formula has a cost, whose range ranges from 1% to 10% of the TTC rent collected. A comparison between several rental management companies is therefore necessary.
How will I finance my rental purchase?
- My repayment capacity is sufficient
At the beginning of any rental investment, you must determine your borrowing capacity. But between the results that gives you a simulator and what a banker thinks, there is a margin. Indeed the lenders will withdraw 30% of the amount of rents that you hope to cash.
- I already have credits in progress
Banks are generally reluctant to give a home loan when consumer credits exist. However, some of them practice the principle of smoothing or landing. Clearly, the lender will grant you a deferred repayment until you have finished repaying your outstanding loans.