Many people are interested in real estate investments and what they should look for in these Properties. Since this industry has many scenarios and situations that can diminish your returns first-time investors often feel overwhelmed. As such, you must proceed with caution even though the returns are often really lucrative.
In Toronto, Real Estate agent Matt Smith has extensive experiences when it comes to helping investors acquire and manage investment properties — single-unit condominiums in specific. Many of the people who live in both the Vancouver and Toronto areas have popularized these investment vehicles because the supply and demand for such units are apparently endless. Currently, there are 11 projects just in Toronto’s downtown Bloor Yorkville area. Encompassing over 50 stories these condominium units offer renters lots of places to live and investors lots of money to enjoy.
The geographic boundaries where you intend to invest are mainly restricted by whether you want to outsource Property management services or if you’re willing to manage the property yourself. When you manage the property yourself, you should look for properties that are easy to travel to. However, if you contract an outside property management service, this isn’t as big of a factor.
Considerations When Searching For The Perfect Rental Property
There are ten features investors should consider when they’re in the market looking for a perfect real estate investment property. These include:
Employment opportunities are important because those locations that have a growing job market attract more people, meaning more renters. This is especially true in areas with large rent/own ratios. Statistics Canada has reliable and timely information about the labor market. Also, watch for large companies moving into an area because migration will follow. Another viable option is college towns because there you’ll find a steady flow of students in need of off-campus housing. However, this demand may only be strong during the school year — from September through April.
Location and its quality influence the type of renters you attract to your rental property. This is where things like the proximity to things like transportation, hospitals, universities or colleges, major business centers, local restaurants and shopping matter. The more central the location, the greater the demand for housing. You can also look at the Walk Score.
When you have an income property, your rent is your staple for the month. Learn what the average rates in your area are for rent. You want to achieve above or below this amount so that you can at least pay your mortgage, taxes and other miscellaneous expenses such as insurance. If this is something you can achieve, then you can move forward.
Make sure you inquire about crime rates because nobody wants to live in an unsafe neighborhood. Statistics Canada is a great resource for this as well. You can also call your local police department to find out if the neighborhood is safe or not.
Take time to find out what amenities and attractions are nearby that will appeal to your renters. Think about things like shopping malls, parks, movie theatres, gyms and access to public transportation.
Many renters are truly concerned about the school district and its schools, especially if they have children. This is a key variable that can increase your renter pool and make your property significantly more valuable.
Look around to see what future developments are planned for the area. Consider how these would positively or negatively impact your investment property’s value. High-growth areas are obviously more attractive than those that are currently declining. For this reason, you should look for neighborhoods that are in the early stages of gentrification as they’ll typically result in faster and higher appreciation.
When there are a lot of rental properties available on the market over the past couple of years, you’re in a better area than if it was only a seasonal trend. This is why it’s important to look at how many vacant properties are near you so you’ll know how this could impact your monthly rental rates.
The costs of property taxes affect your bottom line. Make sure you review them along the side of current market value assessments to see if they’re high. If they are, try to find out what the reason is.
Insurance is another cost that will eat away at your bottom line. While you want to make sure you can get insurance, you don’t want to pay a lot for it. Take some time to work with your insurance agent to make sure the property isn’t in a floodplain or near any natural disasters. Knowing the risks of claims that may exist helps you determine whether you can even get coverage.
Residential single-family homes and condominiums are the easiest and best investment properties for beginners. Condos are low maintenance because the condo corporation is usually responsible for all external repairs. However, you must watch out for high maintenance fees so do your research and comparative analysis. Make sure your costs are in line with the property in question.
Once you find a desirable property in a good neighborhood, make sure it has both appreciation potential and good projected cash flow. Always work with a highly seasoned and experienced Realtor with a proven track record of helping buyers acquire investment properties. It’s always a good idea to have a successful Realtor on your side to help and advise you throughout this exciting opportunity.
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