Real estate can be a sound part of a financial portfolio. If you are thinking of buying an investment property, your primary residence may be a good place to start looking for financing.
While becoming a landlord is not for everybody, owning rental property in the form of a suite in your own home, or a fully separate property can be a great way to round out an investment portfolio, generate extra monthly income, or even just pay down your own mortgage more quickly.
There are two distinct situations where you could have rental income:
- owner occupied plus rental
- non-owner-occupied rental properties.
Owner occupied plus rental
An owner occupied plus rental property would be a house that you’re purchasing for yourself to live in that also has either a suite, carriage house or basement that you’re able to rent out to another person.
A portion of the income generated from the rental portion of the property can be added to your regular income, thus helping you to qualify for a more expensive purchase than you would have otherwise.
Non-owner occupied rental
This is simply a property where you are not living in and is instead rented out completely. This could be a house, condo, or even a house with more than one suite.
Things to consider:
- The minimum down payment will be 20% of the purchase price.
- You will need to be able to qualify not just for the mortgage on the rental property, but also any existing mortgages you have as a complete picture. Needless to say, a portion of the income generated from the rental can be added to your regular income.
Solid financial advice is critical when buying an investment property. Our mortgage brokers have a combined mortgage industry knowledge of over 18 years. Save yourself time, money and frustration by putting our years of experience to work for you.