Believe it or not, the new year is almost here and it’s time for resolutions, goal-setting, and wishes for a great year. If investing is on your future to-do list, now is as good a time as any to start looking at properties.
Markets rise and fall. Areas go in and out of style. Regardless, the fact remains that investing in property is one of the most popular ways of increasing your income over time. Where do you start? Here are our top tips to keep in mind when buying an investment property in 2022:
Are you ready?
First things first, ask yourself: are you prepared for being a landlord? There’s a lot that happens after the purchase and lease signing. That means being available for your tenants, being responsible for yard maintenance, and handling repairs (organizing getting the repairs completed, as well as financially).
You’ll also want to ask yourself if you’re able to make such a large purchase and take on the additional expenses, while still being able to manage your existing financial obligations.
Should You Outsource Management?
Working with an agency to manage your rental may be a better choice for you if you would rather stay an arm’s length away from the day-to-day management. Although you are still responsible for maintenance and repairs, a rental agency typically handles the interactions with your tenant, and this may reduce the stress on you as the property owner.
Bear in mind that this means you will need to pay the agency for their services, so you may want to consider whether the reduced profit margin is worth it or not.
Consider the type of property you would like to invest in. Any type of residential dwelling can become an investment property, but not all are created equal. Condos and townhouses are often popular because of their size, cost and relatively low maintenance requirements. If you’re purchasing within a housing complex, make sure you understand all of the rules and regulations that come with purchasing an investment property.
Location, Location, Location.
We’ve said it before, and we’ll say it again: Location matters. The more desirable the location your property is in, the easier time you will have finding tenants. High quality locations are those with desirable schools, close to hospitals, have access to public transportation, and are close to businesses.
If you’re ready to move forward, it’s time to get your ducks in a row. Ensure your credit is at an appropriate level, make sure you’re savings are topped up (aim for a 20% down payment) and gather a team of experts to help you along the way: a REALTOR®, mortgage broker, legal, and tax support are all key players in the transaction.
There are a lot of things to consider when buying an investment property. If this is on your list of wishes for 2022, send me a message and let’s chat about your options.