As the housing market continues on its upward trend this year and there seems to be an abundance of people looking for a great place to rent, as a smart investor it’s likely crossed your mind to look into the possibility of getting into the market. But is becoming a landlord really as easy as buying a property, posting an ad and moving someone in? It can be, if you plan well and are smart about how you approach your investment!
Being a Landlord Can Be Easy with the Right Preparation
Becoming informed first is the best way to enjoy success as a property owner to both maximize your return, and minimize effort in maintaining the property – and happy tenants.
Looking for an investment property to buy? At AllinRealty, we’re specialize in serving property investors. We can help you think through all the considerations and questions you may have. If you’re in Burlington, Oakville or West GTA keep an eye on our ongoing new development properties or current listings.
Make a plan before you buy
Whether you’re new to buying investment properties or a seasoned pro, you are no doubt aware that buying a property- whether to flip or rent out- is a great long-term investment. However, it’s important that you don’t just run out and buy the first seemingly great deal that you find. There is significant value in doing some research to ensure that you buy the right property for your goals.
If you are planning to buy a property with the intention of renting it out and becoming a landlord, you’ll want to consider what kinds of tenants you want to market to. If you want a family, you’ll want to ensure that the proximity to schools, playgrounds, green spaces and shopping markets is ideal. However, if your ideal tenant is a professional single or couple, looking for great condo space that is near the GO train, the 400 series highways and easy shopping might be more in line with your needs.
Taking a step back to envision your end goal is always the best first step when looking into buying a property as a rental investment. This will help ensure that both you and your tenants are happy in the long term.
Do your math
Once you’ve settled on the picture of your ideal tenant for your rental property, spend some time doing the math to ensure that you’re making a sound investment. Think about the property appreciation, whether you’ll have to do any repairs, how long it may sit on the rental market before a lease is signed and whether it may need any significant work down the road like new windows, doors or roof. These are all factors that can affect your overall income and you don’t want to be hit with any unexpected surprises down the road.
When it comes down to buying a rental property the most important thing to keep in mind is that you’ll want to ensure positive cash flow. If you buy a unit and it sits empty for 6 months without a renter to help you pay the mortgage, can you make that work? If not, you may need to reconsider what your budget allows for when it comes to down payment and monthly mortgage payments.
Condos are a top option
When first becoming a landlord, condos are often a great choice to help you ease into the world of rental properties. With most maintenance included in the HOA fees and a property manager on site there is much less day to day upkeep required by you as the owner. In addition to these regular expenses, condo boards also often pool funds to pay for eventual roof repairs, window replacements and other communal jobs so you will likely pay less overall than if you owned a single-family home or duplex.
With the housing market on a continuing upward swing, there is always a large renter pool that will help you get someone into your unit. Condo buildings are desirable for most renters for many reasons, including the ease of maintenance, the included amenities and the standard of living they provide.
A great long-term investment
At the end of the day, buying an investment property to rent out and become a landlord isn’t any sort of get rich quick plan. Rental properties are an excellent long-term investment, especially if you can get into a preconstruction condo and buy while there are significant incentives at play.