If you are considering to invest in rental real estate, you will need to a lot of time and money for that project. Real estates are always a good form of investment, and that is something no one can deny. But, is now the right time to purchase a place in Toronto for rental? As you know there are many other ways for investment such as stock exchange, gold, or nowadays the most popular – cryptocurrencies. Not to mention that these types of investment can make you a good money in a short term. Are you sure that investing in housing in Toronto is something you really want? To be honest, if you are thinking about long-term investment, this might be the perfect thing for you. Especially if you are planning to rent. This way you will have a steady return on investment.
Invest in rental real estate – pros and cons
Speaking about invest in rental real estate, there are positive and negative sides of doing it. Just like for anything else. What you need to do is to identify pros and cons of this investment. That is the best thing for you to decide if this is the best decision for you. Generally speaking, any kind of investment, especially in real estates is a good move. But, you need to be aware that you will spend a lot of money, and return will be very slow. On the other side, you can be sure that eventually, you will make a profit in the future. Now we’ll go through most common things regarding this potential investment.
Pros of invest in rental real estate:
- Steady return on investment
- You will own a property which you can sell if market prices go high
- You will have tax benefits
Cons of invest in rental real estate:
- You might experience problems with tenants
- If market price goes down, you might actually end up losing money
- Cash flow problems during vacancies
- You will not be able to have direct access to the money you will use for purchase
There are more things to be added to these two lists, but it is up to you to decide what is beneficial for you. Just make sure you think about everything before you make the final decision.
How to find the perfect real estate?
Once you decide that you will invest in rental real estate, you need to find the perfect property. Now, if you have an unlimited budget for that purpose, you will have no problems. But, if your savings are not that big, you will need to invest some time into research. Purchasing a property in Toronto is something many can’t afford, as prices are through the roof these days. That is why you need to find a place which is affordable, but still in the good neighborhood. If you are planning to rent that place, you must meet some expectations regarding location.
Now there are two ways to find a good real estate. You can do it alone or you can hire a realtor to help you. If by any chance you already have a place that you want to buy – great. But if that is not the case, you will need to put your investigation skills to good use. One way to find a good property DIY style is to check the offer on the internet. As you probably already know, there are many websites where you can find houses and apartments people want to sell. You can also ask your Toronto movers for advice, as they have a first-hand info if someone is selling. Your friends and colleagues might be a decent source of information as well. So, ask around and see what you can find out.
Is hiring a realtor smart idea?
In short – yes. Realtors are professional real estate brokers, and they will most certainly help you find the best property within your budget. But hiring a realtor is not a free thing. Actually, finding a good realtor can increase your overall costs and decrease the amount of money for property purchase. So why should you hire such professional? The answer to this questions is not that hard. Realtors have all necessary information, and market insights that can solve your dilemma. Additionally, they are able to get you a better price during negotiations as they have any information. Even though it can be a more expensive solution, realtors will be of a great help in this pursuit.
What you need to be careful about is which realtor you are going to hire. Not of them are good, and not every realtor can meet your requirements. The first thing you need to find out are makings of a decent realtor in Toronto. Once you get familiar with features of good real estate brokers, you can start looking for one. Make sure you explain to them your requirements during your first meeting. Things you should tell your realtor are:
- Your budget limit
- Type of the property
- That this is an investment purchase and not for you to live in at the moment
Once you explain to your realtor these things, he will be able to make a strategy for the actual property pursuit. What you can count on is that in the end, you will find what you are looking for.
Let’s sum it up
So, the first thing you need to do is to decide if you are going to invest in rental real estate or not. If you choose to go with this long-term type of investment, it is time to find the perfect property. You can do it by yourself, or decide to hire a real estate agent to help you. Regardless of the path you choose, make sure that property you want to purchase is suitable for renting. And that is it. Just make sure you prepare for having tenants. If you are not willing to do so, you can always find a rental service company to do it for you.