Don Stoddart, AMP

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Investment Properties

Investment Properties and Where to Start

Investment properties are now accessible to many average Canadians.

Investing in properties in Canada can be a good way to build wealth and generate passive income. There are many ways to invest in real estate, from purchasing a home for yourself to investing in rental properties. In some cases, you can even do both.

If you speak with a financial planner, they should tell you that your investments should be diversified. So, you should have real estate along with Investments in RRSP TSFA’s. Typically I have noticed in my 60 years plus that when housing on the rise stocks suffer and when stock rise housing suffers so by holding both you have balance. What I also know is if your money is just sitting is a bank account your losing money and get his is a hard concept for people tom understand.

Here are some tips for investing in real estate in Canada:

  1. Research the market: Research the local real estate market to determine which areas have strong rental demand, good potential for appreciation, and affordable prices. You may also want to consider factors such as transportation, schools, and local amenities. Hospitals are also very important. If you plan on moving to Brampton, please click here.
  2. Create a budget for buying a property. Figure out how much you can afford to invest and set a budget that takes all of the costs associated with owning a home into account, such as mortgage payments, property taxes, insurance, maintenance and repairs, and management fees or Condo fees.
  3. Find a Broker: who works with lenders that specializes in financing investment properties. When buying investments, it is not always about the best rate, It is about cash flow and affordability options based on your financial situation and investment goals. Interest only mortgages and longer amortization could help make your dream a reality.
  4. Hire a real estate agent: Hire a real estate agent who specializes in investment properties to help you find the right property. Your agent can also help you negotiate the best terms and price on your purchase. They need to understand the demand for the rental market and what fair market rents are.
  5. Consider property management: If you plan to rent out the property, consider hiring a property management company to handle the day-to-day operations of your rental. This can include advertising the property, screening tenants, collecting rent, and handling maintenance and repairs.

It’s important to do your research, understand the risks, and seek the advice of a financial advisor or a mortgage broker before making any real estate investment. You may also want to consider diversifying your investment portfolio to spread risk and achieve long-term financial stability.

Investment properties – particularly smaller, residential real estate – are now accessible to many average Canadians. And as any homeowner will confirm, real estate has been one of the most attractive investment categories in Canada for the past decade. If you’re considering an investment in real estate, start by having a conversation with an experienced Mortgage Broker, to explore some of the new options and great rates available today. You may be surprised to learn that there are more options available than ever before.

There’s a lot to consider when buying investment property, especially if it’s your first time. Real estate can be a great investment. But there are many factors to consider, such as location and market conditions.

For example, you may want to invest in one or two properties in a hot housing market where demand is high, and prices are rising rapidly. Or you may prefer to buy a property that’s less expensive, but it will allow you to rent it out easily.

If you are new to investing in real estate, it’s important to understand the different types of investment properties. The most common types of real estate investments include single-family homes, condominiums, and townhomes.

Before you buy you must put into account your GDS and TDS debt ratios:

GDS (Gross Debt Service) and TDS (Total Debt Service) are two financial ratios used by lenders in Canada to assess a borrower’s ability to repay a mortgage.

GDS is calculated by dividing the total housing costs by the borrower’s gross income. This ratio is used to determine the percentage of the borrower’s income that is being used to cover housing expenses such as mortgage payments, property taxes, and heating costs.

TDS, on the other hand, is calculated by adding the GDS to other debt payments and dividing the total by the borrower’s gross income. This ratio is used to determine the percentage of the borrower’s income that is being used to cover all debt obligations, including housing expenses and other debts such as credit card payments, car loans, and lines of credit.

Lenders generally look for a GDS ratio of no more than 39% and a TDS ratio of no more than 44%. Borrowers with higher ratios may find it more difficult to secure a mortgage or may be required to provide additional collateral to secure a loan.

Keep in mind that the GDS and TDS ratios are just one factor taken into consideration when approving a mortgage. Other factors such as the borrower’s credit history, employment history, and down payment amount may also be considered.

Contact us or apply today to learn more about the mortgage approval process and how it may affect you.

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