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2. Location, Location, Location:
As a landlord, you’ll quickly realize that location is your investment’s prime selling point. If investing in a detached home, pick a family-friendly area that’s quiet, safe, and within the radar of good schools. For condos, begin your property search close to the downtown core or in areas easily accessible by public transportation.
3. Don’t overlook condo fees and taxes:
Property taxes are not standard across the board and, as an investor planning to make a passive income from rent, you’ll need to be aware of how much you will be spending in taxes.
To be a good investment, a property needs to come as close to positive cash flow as possible. A smart investor will factor in all the short and long term costs, including welcome taxes, land taxes, school taxes, and municipal taxes to determine whether a unit is an asset or a liability. For an easy breakdown of how to calculate net income, first generate a list of your carrying costs using our mortgage calculator. Then, use our our investment property ROI calculator to find out whether the investment is cash flow positive.
4. Look into Projected Developments:
Before making any investment, look into the urban plans for the street and neighbourhood you’re planning to buy in. If there are many new condos, business parks or malls going up in your area, it is probably a good growth area. However, keep in mind that a lot of new condo developments will also mean competition for your rental unit.
5. Consider Vacancy Rates:
Vacancy rates in the building and in the neighbourhood should be taken into consideration when doing your annual projections. Short term, fully furnished rentals will incur a higher vacancy rate, while semi-furnished rentals will secure more stable occupancy rates.
6. Calculate Average Rental Prices:
What is the going rental price in the area? What is it projected to be in the next 5 years? These figures will help you calculate your cash flow and decide whether your income will cover your expenditures.
7. Compare Property Types
Different property types will require different levels of investment, both in terms of capital and in terms of maintenance and time. Condos are easy to manage but will appreciate more slowly than single-family homes. Revenue properties come with a heftier price tag but will assure positive cash flow on a monthly basis. Read more here >>
8. Staging your rental property
When staging an investment property, your decorative choices should reflect the preferences of the mass market. Walls should be painted a light or neutral shade, and any furniture or decor should be as toned down as possible. If you don’t plan on furnishing the home, choose a property with spacious rooms, big windows and an open concept kitchen. Read this article for more home staging principles.