Simply put an investment property is any property the produces income. That income may be in the form or rent or it may be the result of selling the property for profit. The most common type of investment property is residential but myriad investment opportunities are also available in both the commercial and multifamily real estate sectors. If obtaining an investment property is an idea that appeals to you the professionals at RMAI/Loancentral.ca can help you make it happen.
Investment Property Thornhill: Obtaining a Loan
Unless you’re sitting on a mountain of cash you’ll need a loan to purchase an investment property. While securing financing these days from conventional lenders is more difficult than it used to be obtaining a mortgage for an investment property is still possible if you have decent credit and meet certain income requirements. You also have options when it comes to the type of purchase you can make.
- The Non-Occupancy Loan – A non-occupancy loan is for those instances when you will not be living on the premises. Which means you purchase the home, ensure it is ready for occupancy and then rent it out without ever occupying it yourself. Typically you’ll need 20-25% down for a non-occupancy loan. However, when closing and renovation costs are factored in the actual up front cost will likely be 5-10% higher than that. In order to qualify for an attractive interest rate you’ll also need good credit.
- The Owner/Occupancy Loan – An alternative method of breaking into the rental property business is to purchase the investment property as an owner occupant. The big advantage of an owner/occupant loan is that instead of 20% down or more you’ll only have to put down 5 or 10%. The downside is that you’ll need to live in the house or, in the case of a multi-unit building, one of the apartments for at least a year which will obviously impact what you can make on the property during that time. In the long run though you should more than make up for any losses sustained during the first year.
Keep in mind too that should the bank turn you down you still have the option of pursuing a private mortgage and we can help you with that.
There are some significant advantages to purchasing an investment property in Thornhill that has existing tenants, such as:
- You won’t have to spend time, money and energy searching for tenants yourself.
- You may be able to collect rent from them before your first payment comes due.
- You don’t have to spend any money making the property suitable for occupancy.
- The seller will be compelled to transfer any security deposit(s) to you.
Securing a loan for an investment property in Thornhill doesn’t have to be an ordeal. The pros at RMAI/Loancentral.ca can help ease your transition from homeowner to landlord with timely advice and an investment property mortgage that will fit you like a finely tailored suit. Call today to find out more.