Buying a property with the sole intention of earning passive income and fostering long term equity growth should be handled differently than a traditional home purchase. Beyond the logistic and financial strategies that will be foundational to your success, investing in rental properties involves complex operational and legal processes that can be difficult to navigate for those underprepared.
As leaders in West Toronto’s complex real estate arena, Christensen Real Estate Group is all about helping clients grow their wealth through real estate investments. In this article, we will offer in-depth guidance on how to buy a rental property in Canada, with an emphasis on supporting first time investors.
Looking to invest in real estate? We can help! Call 416.772.4723 or reach us by email at evan@christensengroup.ca.
Consider Your Ambitions
One detail that is often under-considered by first time real estate investors is suitability. Yes, owning a rental property is a financial venture, but it’s also a deeply personal one. No two investment opportunities are identical. With that in mind, you will want to mull over your personal objectives and capabilities before you head to the market.
Consider the type of investment experience you are looking for. For example, how hands-on (or off) would you like to be with property management? Do you have a specific income threshold that you would like to meet?
Sorting out your ideal outcomes and expectations will arm you with key insights as you move into the next stage of your investment journey.
Searching for more investor-focused resources? Explore these related readings.
- The Ultimate Guide to Investing in Toronto Real Estate
- What Investors Should Know About Toronto’s Municipal Accommodation Tax
- How to Calculate Rental Property ROI
Know What You Can Afford
Having a comprehensive financial plan in place is paramount to a successful investment. Just like purchasing a home that you would live in, buying a rental property entails high upfront costs, especially in a major market like Toronto.
In today’s market, one of the most significant costs facing real estate investors is interest. To that end, the type of financing that you secure will directly impact your returns in the short and long term.
Therefore, it is a good idea to perform your research or work with a qualified mortgage broker to ensure you choose the right program. Some Canadian lenders even offer specialized investment property mortgages that are uniquely geared to investors.
Can I Use an FHSA to Buy a Rental Property
Many home purchasers in Canada take advantage of the first home savings account (FHSA) to maximize their down payment. But can you do the same as a first time investor?
Even if it will be the only piece of real estate you own, you unfortunately cannot use Canada’s first home savings account to buy a dedicated investment property.
Work With an Expert
One of our top real estate investment tips is this: as an investor, you are only as powerful as the Realtor you choose to work with. Regardless of what type of property you are looking for, working with an experienced real estate professional who understands the intricacies of Toronto’s dynamic rental landscape should be your topmost priority.
In addition to helping you source and purchase a great rental property, the right agent can recommend value-adding upgrades, assist with tenant sourcing and other managerial duties, and offer long term guidance to ensure your venture is a smooth one.
Seeking insights on West Toronto’s lucrative investment market? Explore these resources from our blog.
- How to Budget For Investment Property Maintenance
- Is it Possible to Take the Risk Out of Real Estate Investing?
- 3 Ways to Invest in Toronto Real Estate Without Buying an Income Property
Understand the Rules & Regulations
If you plan to operate a rental property in Ontario, you must follow the rules. This includes following all bylaws and regulations related to property modifications, general safety, tenant sourcing and communications, lease documentation, collecting payments, and more.
A great place to start is by reading Ontario’s Residential Tenancies Act, which outlines your specific responsibilities as a landlord along with the rights of your tenants.
Start Your Investment Journey
Eager to purchase an investment property in one of Canada’s best rental markets? Christensen Real Estate Group is your best resource for sourcing and securing a profitable income property. We know our local market better than anyone and have the insights and intuition to help you discover the perfect neighbourhood to invest in.
As investors and landlords ourselves, we can provide you with critical advice on tenant sourcing and communication, relevant regulations, and more to help you get off on the right foot. Not only will we help you identify lucrative, high-quality opportunities, but we’ll ensure you’re set up for success today and tomorrow.
Ready to invest? Our team has decades of industry experience to support your goals. Call 416.772.4723 or reach us by email at evan@christensengroup.ca.
