PLANNING A REAL ESTATE INVESTMENT PROJECT
Are you thinking of investing in rental properties to start building your assets? Let’s look at the strategies you should adopt to get your project off the ground.
Establish a strategy
Before investing in a rental property, it’s important to establish your strategy and define your objectives.
If you don’t live in the property, it’s particularly important to define your budget, your borrowing capacity and the monthly mortgage amount you will have to pay.
If you want to invest and live in the same building, you may want to consider a duplex or triplex, where you could live in one unit and rent out the others. Finally, if you choose to leave this dwelling one day, you can rent it out and thereby pay off a larger part of the mortgage.
Establish a budget
If your project is clear in your head, you are now ready to establish your budget, calculate the profitability of the project, and study its feasibility and viability.
For this step, we strongly recommend that you work with a real estate broker who specializes in real estate investing. He or she will be able to advise you judiciously throughout your project and refer you to various professionals when necessary.
Do your own calculations:
- What will your monthly income be?
- What will your monthly expenses be (mortgage, various taxes, reimbursement of credit cards, car loan, current expenses, etc.)?
- How much money will you have left over monthly?
- How much money do you have for the down payment?
- Do you have an emergency fund?
You can use the financial calculator on Centris.ca to obtain estimates of your borrowing capacity and to find out the calculation of your mortgage payments.
To be successful, a rental property investment must be well planned. Take advantage of the support of a real estate broker to get your project off to a good start.