Wednesday 8 August 2012

So you would like an Investment Property....

So you want an investment property...

Don’t trust the investment market?  Looking for something more secure? 
Care to grow some equity and perhaps some monthly income as well?

Good call!

Here are some things you need to know;

If you are looking to purchase a multiple unit residential property, there are a couple of options;

  1. If you are going to move into one of the units, all you need is 5% Down Payment as you will be occupying the property. (This applies to properties up to 4 units for most companies)

  1. If you are not going to be occupying the property, you will need 20% Down. (Up to 6 units)

If you are looking to purchase a mixed use commercial / residential building, things get a little bit more difficult.  (Commercial rental space with residential above it for example)

  1. Even if you are looking to move in, you will need at least 25% down for this type of property in most cases (depending on the zoning)

  1. This property is considered commercial, therefore different rates / appraisal costs apply. This type of financing takes a lot longer than residential because there are more calculations to be made and more paperwork to be done.

How do you qualify?

Lenders use the same calculations to approve you, with a couple of considerations.  Here is how we do it;

We take your monthly must pay credit items

Mortgage payment +Property tax +heat / hydro, Credit Cards +LOC + Car Payments, etc.
Dived by

Gross Monthly Income + 80% of Rental income (most companies)

*Under the new regulations, your GDS / TDS needs to be below 35 / 44% (for most companies)

Please consider this a brief introduction to rental properties.  If this is something you would like to consider, please contact me and I will be more than happy to meet with you and discuss your options.

Thanks again for visiting!  Please feel free to share with the people you know.

Andrew Young gets it done! 

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