heading

Welcome to MORTGAGE TAILORS, I have over 15 years experience

heading

heading

Investing in Real Estate

Investing in Real Estate – Why Edmonton and Why Now?

What it is:

Tempted to purchase an investment property, here are 3 reasons why you should invest in real estate.

1. Financial security

2. Financial Freedom

3. Secured Investment

To begin, securing financing for an investment property requires a minimum of 20% down payment from your own resources. This means that your down payment cannot be gifted or borrowed.

Next, to qualify for a revenue property, you must be able to debt service your existing primary residence costs (ie. mortgage payments, property taxes, and heat) along with the payments of principal, interest, tax, and heat for the revenue property. Often, we can factor in a percentage of the potential rent collected to help one qualify however only a portion of it can be used. This portion varies with different Lenders and can range from an add back of 50% to 80% of the rent. Your Mortgage Broker can assist you in finding the best solution to help achieve your investment goals.

Also, many Lenders may stipulate that you meet a Net Worth requirement. Typically, this is 10% of the property value for each rental property valued up to $500,000 and $50,000 for each rental property valued at more than $500,000.

Rental income must be verified by providing one of the following:

1. Copies of current lease agreements;

2. T1 Generals including Statement of Real Estate Rentals for the most recent taxation year; and/or

3. A full Appraisal Report with Market Rents.

Why it is important:
Another thing to keep in mind is that Lenders often have limits on the number of doors they are willing to finance with them as well as with all Lenders. Many Lenders have their maximum set at four doors (including your primary residence) with them and others have a maximum of 4 – 11 doors allowed between them and all other Lenders.

Financing your investment property can occur in a couple different ways, depending on your end goals. Most real estate investors buy long term and the above information is if you are purchasing a rental. However, if you are considering a “flip”, your financing options are different.

Why you specialize in it:

I search over 20 well known lenders for the best rate and mortgage product for you. I can help with new purchase mortgages, mortgage renewals, refinancing, debt consolidation, financing revenue properties, new to Canada, Flex down payment and new home construction mortgages. It is a free service for you, as I am paid by the lenders in the form of a finder’s fee. You can skip the rate negotiations and enjoy finding the right rate and mortgage solution with only one phone call. I would be happy to provide you with unbiased information and advice about the mortgage products and options that best fit your needs.

Consumer Fit:

If you have questions about owing a rental property and different strategies to begin owning a revenue property or expanding your current portfolio we can begin to get you onto the right path. Some people are willing to turn their current home into a rental property and purchase another, some are able to save the require 20% down payment for a rental and others have different financing idea’s. Let’s have a good discussion.

heading

©2017 Cindy Janisch, Mortgage Associate