A Path to Long-Term Wealth
Buying a rental property can be an excellent way to build wealth and generate additional income over time. Whether you’re investing in a house, condominium, or multi-unit residential building (2 to 8 units), real estate offers many Canadians an accessible and profitable investment opportunity.
Understanding the Mortgage Requirements
Rental properties generally do not qualify for mortgage insurance, except in a few cases, meaning a down payment of 20% is often required (25% for buildings with 5 or more units). However, in some situations, we can finance the new property at 100%—no down payment required—by using collateral security on one of your other properties.
If you’re a first-time buyer who doesn’t plan to live in the property, or if you’re already a homeowner, you won’t be eligible for the Canadian Home Buyers’ Plan (HBP).
Advantages of Real Estate Investment
Investing in rental property can provide several key benefits, including:
1. Reliable Income Stream
Renting out the property allows you to generate income. Your rental income can cover your mortgage payments, and over time, as your mortgage balance decreases, you can keep more of the rental income as profit.
2. Using Leverage to Maximize Returns
Real estate is one of the few investment types that allow you to own 100% of an asset while using financing. This makes it an attractive option for investors seeking high returns with a lower initial investment.
3. Wealth Creation
As your property appreciates in value and your mortgage balance decreases, you build equity in the asset. Over time, you will own the property outright, turning your initial down payment into long-term wealth.
4. Tax Advantages
Real estate investors can benefit from a variety of tax deductions, including those for mortgage interest, maintenance, repairs, property taxes, and condo fees. Working with an accountant or tax specialist ensures that you take full advantage of all available deductions.
Is Real Estate Investment Right for You?
As with any investment, it’s essential to carefully weigh the pros and cons of investing in rental properties. Our team is here to guide you through the process, helping you make informed decisions and find the best financing options to meet your goals.
Ready to start building wealth through real estate?
Explore your options and take the first step toward a profitable investment.