I work with a lot of investors and my favourite part of the job is helping guide them to  make solid and profitable decisions. Whether you’re just considering getting on the real  estate ladder, or you’re a seasoned investor, read on to find out four things you  probably didn’t know about investing in real estate.



1. If you’re buying an investment, it’s all about the math – don’t let emotions get in  the way. I know, granite counters and bamboo floors are awesome, but how  much do they add to the monthly rent? Real estate investing really does come  down to numbers, and it’s not just price that matters. How much are the condo  fees? How much are the taxes? What kind of maintenance should you expect?  What kind of rent can you expect? An agent experienced in investments will be  able to guide you to the profitable ones and encourage you to run from the ones  that look great but don’t give the best returns.



2. You’ll likely need a minimum 20% down payment. If the property you’re buying  isn’t a primary residence (a primary residence is defined as one you live in at  least six months of the year), then the bank will require you to have a bigger  down payment. In most cases, that’s 20%.



3. The good news? Most investors reach the break-even point with a 20% down  payment. What does that mean? Your rent should cover your mortgage payment  (at 80% financed), your taxes and your condo fees (if any). If you can only  become cash flow positive with a 30% down payment, something is wrong with  the property you’re considering - perhaps you need to look in a lower price  bracket.



4. Most lenders will consider 80% of the rental income when calculating how much  you can afford. When banks decide how much mortgage they want to give you,  they’ll look at your income, your debts, and your credit score. If you’re buying an  income property, they’ll add 80% of the projected rental income to your income,  so you’ll qualify for a bigger mortgage. Keep in mind that some lenders won’t  consider rental from illegal apartments and may require an actual lease in place  or an appraiser to confirm the amount of rental income that will be generated.



Do these tips sound helpful to you? Stick around for next week where I share four more  things you probably should know about investing in real estate!




 

Thanks for reading today’s BLOG!!!

Brian Kondo
Sales Representative / Team Leader
The Brian Kondo Real Estate Team
Re/Max Hallmark First Group Realty Ltd.
905-683-7800 office
905-426-7484 direct
brian@briankondo.com
www.BrianKondo.com
www.BrianKondoTeam.com

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