Investment property in many locations is currently a trending topic, but when it comes to investment property Toronto is a location at the top of the list. Investors are staking their claim to buy in order to profit from rental receipts, flipping or renovating and selling. Toronto indeed has a rich history when it comes to the real estate investing business, and there has never been a better time.
Of course, you don’t want to go into any business venture without the proper knowledge to guide you. What do you need to know?
If you’re building a real estate investment portfolio, you want to know the ins and outs of financing. There are stricter guidelines to getting a mortgage for a second home as an investment if you’re not opting to pay cash.
Of course, this doesn’t make things difficult, as you can still get that investment property for as little as 20 percent down. One other thing to consider is the amount of rental proceeds that can help qualify you for the mortgage. If you’re going to rent out the property, you can only include 50 percent of your rental profits when figuring the mortgage qualification.
Of course you need to know about taxes, especially if you’re not a Canadian resident. Granted, it’s not complicated and can be explained in two steps. First, any income generated from the property is just that, income, and therefore is taxable by law. Secondly, you pay taxes on your property of course, just as in the US, and you can be asked to pay capital gains taxes if the value of your investment increases. It can helpful to discuss such matters with an accountant.
Timing is everything when it comes to all types of investing. The perfect timing might not be absolutely necessary, or a larger window might be available in other words; however, patience must be exercised, particularly with real estate.
When investing in real estate, there is potential for huge gains from each transaction. Those transactions can take time, as the timing for the sale has to come into play.
Think about this when leveraging your money and putting it into investment properties. For investment property Toronto is one of the best choices, but you still have to understand that long term goals and objectives are going to come into play. Of course, this doesn’t mean you can’t get to flipping properties at the same time.