With all the talk about the international investors driving the market, we thought you’d enjoy some simple and straight-forward answers. Here are the top 4 questions on foreign investor market, covered in the last report […]
There is a fundamental difference between buying a property solely for investment purposes and buying it to live in it.
We all want to live rent-free. Having the revenues cover all of the expenses, including the unit we occupy. And while all of this is feasible, it is important to mention that certain factors affect this outcome: size of the building, revenues, etc. So let’s take a look at what we can expect when searching for a income property.
Buying a property as an investment alone
Your home is else where, but you want to buy as an investment. This is all a numbers game: a property that generates enough revenues to cover all the expenses and then some. The bigger the property (with larger units) the bigger the revenues, in this case you can expect to have expenses paid, plus a little extra at the end of the year. But this does not always occur with smaller properties such as duplexes or triplexes.
Buying an income property to live in it
You’re contemplating to buy, say, a triplex and you’re planing to live in it, your main concern does not go so much in:
After all expenses are paid; How much does this property gives at the end of the year? Chances are with smaller properties they would cover only the expenses.
If you’re living in it, and you only have one unit with tenants, it’s highly unlikely you’ll be making a surplus of money at the end of the year, much less going on vacation with property revenues.
Instead, ask yourself: How much does “your” portion of the mortgage represent?
Once you have found the home you would like to purchase, you need to present the vendor with an Offer to Purchase or an Agreement of Purchase and Sale. As your home is probably your […]
This very complete article was released this morning by the Financial Post. Richard Croft goes on to explain why is real estate a good diversifier in your portfolio: from owning a home to becoming an […]
Greater Montréal Real Estate Board Statistics The resale market is heading for another record year with an11% increase of transactions during the first four months of 2007. According to data recorded in the Greater Montréal […]
…And hammer away at renovations Royal LePage survey finds 25% of women searching for a home are looking for a ‘fixer-upper’ and plan to do the work themselves – Currently, 30 per cent of single, […]
Recreational Property Values in Canada ‘Set to Soar’ by Jim Adair Canada’s two largest real estate companies issued reports about recreational properties this week, and while bargains can still be found for those willing to […]
A home is typically the largest purchase you will make in your lifetime, and for most Canadians this means obtaining a mortgage. The amount of your mortgage will determine the size and location of your new home – not to mention the size of your payments. So how do lending institutions decide how large your mortgage loan can be?
Lending institutions (such as banks, credit unions, trust companies and insurance companies) want to be certain that you are capable of repaying the money you borrow. Consequently, the loan application process is thorough. Lenders consider your income, credit history, debt load, employment history and collateral, including the value of the property you wish to buy.
Although there is some discretion in determining the exact amount, the size of your loan is generally calculated using set formulas – Gross Debt Service Ratio (GDS) and Total Debt Service Ratio (TDS).