3 Reasons Why Buying an Investment Property Is the Best Way to Build Your Net Worth

3 Reasons Why Buying an Investment Property Is the Best Way to Build Your Net WorthWhether you have recently graduated from college or are getting close to retirement, it’s likely that you have given some thought as to how you can grow your net worth. You might have invested in stocks, picked up a few bonds or have a 401(k) plan set up to help fund your retirement. But have you considered buying real estate as part of your portfolio?

In today’s blog post we’ll have a look at three reasons why real estate investing is one of the most effective ways to grow your overall net worth.

Reason #1: It Generates Passive Income

One of the best reasons to hold real estate as part of your investment portfolio is that it can generate passive income in the form of rent. Whether you buy a single-family home or an apartment block, you can almost certainly find interested tenants who will live there. Part of the rent you receive each month will cover the costs of owning and operating the property. The rest of it is income which will continue to build over time.

Reason #2: It Increases In Value Over Time

Another great reason to invest in real estate is that in most cases, it increases in value over time. As long as you are maintaining the property and investing in its upkeep you have a decent shot at it being worth more in the coming years, should you decide to sell. Keep in mind that real estate is cyclical and that it’s not always going to be the right time to sell and realize your gains.

Reason #3: You Can Leverage Equity To Buy More Properties

Finally, our third reason that real estate is the best way to build your worth is your ability to use it as leverage to buy more real estate. For example, say you decide to purchase a house valued at $100,000 as an investment property. Once the mortgage on that home is paid off, you have an asset valued at $100,000 that you can then borrow against. So you can go out and acquire another $100,000 home without having to sell the first. As you can see, this can scale quite nicely over time.

If you are interested in learning more about real estate investing and how you can make use of mortgage financing to purchase properties, give our offices a call. We are happy to share our insight and expertise as well as advise you on the best mortgage products to help reach your financial goals.

The Mortgage Helper: How to Find the Perfect Tenant for Your Basement Suite

The Mortgage Helper: How to Find the Perfect Tenant for Your Basement SuiteDo you have an empty basement or separated suite in your home? If you have a suite sitting empty, you are missing out on collecting some extra monthly income in the form of rent. Let’s take a look at a quick four-step process that will help you find the perfect tenant to rent out your basement suite.

Step 1: Play By The Rules

Is this your first time renting out a home or suite to a tenant? If so, you will want to do a bit of research first. Read up on Fair Housing Rules and other regulations as these will inform you of your responsibilities as a landlord. Keep in mind that you cannot discriminate in any way when it comes to race, religion, gender, family status or disability. Anyone who applies must be given a fair chance.

Step 2: Be Specific In Your Advertising

When you place a rental listing, be as specific as possible in what you are looking for in a tenant. If you are a single, quiet person, you may want someone similar as you will be compatible. Conversely, if you are a young couple, you may clash with a retired senior or someone older. Be as specific as possible but remember that you cannot be discriminatory.

Step 3: Meet Potential Tenants In Person

Be sure to take the time to meet with every short-listed applicant in person. If you are not comfortable with having so many strangers over to your home, consider meeting at a local coffee shop. An in-person meeting will allow you to visually assess the person and determine if your personalities are a fit for living in the same home.

Step 4: Don’t Skip The Checks

Finally, don’t take any shortcuts when performing background, credit and other checks. Ask your tenant for at least one or two references that you can call to verify their rental history. Investing in a credit check will help to assess their risk of missing monthly rent payments. And if necessary, a criminal records check can let you know if they have been in trouble with the law.

As long as you are well-prepared and diligent, finding a suitable tenant for your basement suite can be a painless process. To learn more about mortgage products are perfect for rentals, contact us today. Our mortgage team will be happy to help you!

Buying a Rental Property? These 4 Key Tips Will Ensure You Buy One That Turns a Profit

Buying a Rental Property? These 4 Key Tips Will Ensure You Buy One That Turns a ProfitAre you starting to grow bored of watching your money go nowhere sitting in a bank account? With today’s interest rates doing little to encourage saving, many individuals are looking elsewhere for new investment opportunities. In today’s blog post we’ll share four essential tips for buying a profitable rental property. Let’s get started.

Buy A Property With Year-Round Potential

Many real estate investors agree that the best rental properties are those that generate income every day of the year. The most straightforward situation to manage is one where you have stable, long-term tenants in place that aren’t going to move or change often. Browse local property listings around schools, colleges, and large employers to see if there are any suitable homes for sale.

Once you gain experience and invest in other properties, consider branching out into vacation or short-term stay homes. But to get started, aim for stability.

Predict Your Income And Expenses

Next, you will want to craft a budget. Have a look through rental listings in your target communities to see what renters are currently paying. This will give you some idea of your potential rental income for a similar-sized home. You can then compare this to your estimated monthly mortgage payment, taxes, utility costs, and repairs. It is impossible to predict precisely how much you will need, but this exercise can quickly prove whether this area is likely to be profitable.

Treat Your Rental Properties Like A Business

Since you have already taken the first steps with a budget, you might as well continue down the path to a full business structure. Most real estate investors set their portfolio up in an incorporated or limited-liability company, which reduces personal exposure. It can also be an efficient way to manage any legal issues that arise as your investments grow. Also, there will be significant tax advantages, including being able to write-off expenses such as repairs, contractor work, and renovations.

Work With Experienced Professionals

Speaking of contractors, it’s worth reminding to only work with experienced professionals who are licensed, certified and have references. Paying for quality work up-front ensures that you won’t have to deal with hefty repair bills due to shoddy workmanship.

When you are ready to invest in rental properties, give us a call. Our professional mortgage team is happy to financing options that are perfect for investment and rental properties.