A Real Estate News Article from Yvan D'Addario Real Estate Sales Representative Royal LePage Your Community Realty Investing in rental property has become increasingly popular in recent years. That is not surprising if you consider the potential rewards: you can not only generate rental income, but also profit from increasing housing prices. But success as a landlord requires more than collecting rent cheques and riding the real estate market, there is real work involved, and substantial risk as well. Here are some tips that can help you make an informed investment decision for the acquisition of that Toronto Waterfront condo, King West condo, or Liberty Village condo : Do the math Unlike a primary residence, a rental property is not an emotionally driven purchase, it is an investment. And as an investor, you should think about it primarily in terms of profit and loss, risk and reward. Whether you come out on top will depend mostly on two factors:  Cash flow :
Consider how much rent you can collect each month, and how much will be left over after
 mortgage payments, maintenance costs, and other expenses.
Appreciation : Rental-property owners cannot
rely only on appreciation to make their investments profitable,
but it certainly can help.
Evaluate the market Like any other business, rentals are subject to the basic forces of supply and demand. If apartments are in short supply, you probably will have no trouble filling yours. When you are trying to generate positive cash flow from a rental property, vacancies are perhaps your greatest enemy. They cost you money and generate no income in return. Your first line of defence against vacancies is a good evaluation of the rental market before investing. Talk to Realtors and property managers in the area, and check the frequency of rental listings in the local paper. Once you have a property, vacancies will occur at some point and from time to time. Get assistance from a professional internet advertising service such as Apartments2Rent.Net, who list thousands of vacancies in the Toronto area. The cost is minimal, and if they find you a Renter then your money has been well spent. Keep in mind that certain neighbourhoods, such as those near hospitals, schools, or universities, may have a higher demand for rentals than others. Rentals in the downtown core are often easier to rent than those in the suburbs, and buildings that have bachelors and one bedroom suites are easier to rent than those with two or three bedrooms, as families tend to migrate to their own purchased properties once their families begin to require several bedrooms. Singles, on the other hand, who may be in the market to find a partner before settling down, are a group who tend to rent because they are not yet ready to settle down into a fixed environment and raise a family. This group will traditionally rent bachelors or one bedroom suites and turnover is usually higher, giving you greater flexibility with rents. Prepare for the commitment Owning a Owning a Toronto Waterfront condo, Toronto King West condo, or Toronto Liberty Village condo rental property is more than an investment - it is a business. You have to be willing and able to commit the time and resources necessary to run your business successfully. Whether you are actively involved in the day-to-day operations or hire someone to manage them for you, make sure you understand how much time or money you will have to spend before you invest. There are many property management companies who can run your building for you and who have both the connections and experience to do it well - but you will need to pay their management fee for that expertise. Managing the building on your own is certainly possible, but you will need to establish relationships with plumbers, electricians, maintenance staff, landscapers, carpenters, painters, and drywall contractors - and most of all, a good accounting firm. Article Courtesy: GMAC Mortgage All information provided herein is for informational purposes only. It is not intended to replace professional legal advice nor is there any guarantee as to its accuracy. |
