How to get income from your rental property in Canada

In this expensive fastidious world who doesn’t want a stable income but how to achieve so. Investing in properties is always better than owning assets that generate expenses. So spend your money wisely and choose those assets that nourish with profits and not create costs. Buying a property for own can also be considered as an asset that produces expenses such as you will need to pay for maintenance, taxes, repairs, mortgage and many more so instead you can rent the apartment.

Hence, renting the property can be the answer to cover all the expenses created by the owned asset and recover some profit cash flow. But, it is not always so that the landlord is in profit; there are many instances where a landlord might be thriving financially. There is a various range of aspects one needs to consider while investing in the property area. You need some skills to succeed in this business. 

If you are thinking of entering into the property market as all-time work not as part-time, then you need to need some serious hard work and skills. As it becomes your all-time work then for your living, you need to capture at least 4k dollars per month of profit. This work poses you with great responsibilities, and that might cause anxiety and tension. But, if you want to succeed in this business, you need to follow some tips that are noted below. Always consider these tips before taking any steps.

Tips that you need to consider before entering this field:

  • Fix your budget: This is one of the essential points before investing in a property. You need to know what is your budget before buying any property. If you are looking forward to purchasing any property based on EMI’s or loan, then you need to consider the interest to cover the credit or debt. You should also read Canada’s mortgage rules before you invest, which states that you must have at least a down payment of 20% if it is a small rental property. The above provision doesn’t apply if you don’t own the whole property and own only a part of it. 
  • Team Work: Never try to do things yourself that would mess you up, resulting in loss or failures. So always work with a team where the work would get divided. But who you should include in the team? Then the answer to this is: if you are investing in rental property business then you need a team that has insurance agent, MD advisor, mortgage specialist, real estate agent, lawyer, appraiser, and home inspector. If you have these seven people who you can call your avengers can assemble according to work.      
  • Do some research: Before investing in any property, you need to do a bit of research about the area where the property is located. Always opt for areas that are developed or developing fast, so you might get more profits from the investment. The area should have great jobs and more population growth. The second thing you need to research is what are the current rental rates in the area. This is the most crucial point to know as you are planning to rent the property you should know what the prices currently going on are.
  • Need a property manager: Always consider hiring a property manager. There are many benefits of hiring a property manager as you will not need to answer the tenant calls now and then and the manager will also manage the necessary repairs in the property. Even fees’ of the property manager are affordable they count 8 – 10% of the rental costs. The main benefit of this is it works as a stress buster for the landlords.       
  • Refer to Landlord-tenant laws: Before stepping into the rental business, one should be aware of the Landlord-tenant laws. Top-notch tenants are tedious to find, but if you have your team, it would be easier to follow up then. Following this assign this work to your property manager who will market your property and will search for good tenants. But if you are going to do this alone, then you need to read all the rules and the rights by yourself and prevent yourself from breaking any.
  • Refer Your MD advisor: Before choosing any mortgage deals always prefer help from your MD advisor as he will guide you with the best mortgage solution of your need fitting in your budget.
  • Always consider insurance: This is the primary job to be done. Your valuable asset needs to be protected from unforeseen circumstances, so choosing proper insurance is a must. If you are confused about which coverage is required by the asset for protection, then clear it with your MD advisor who will give you the best insurance solution as per your need. 

Advantages of investing in property 

There are various advantages of owning or investing in a rental property. It can be considered for steady income as nowadays the interest rates are lower and there has been a rise in the real estate prices, causing more profit to the landlords. There such great benefits of the owner, let’s see some of them:

  • Steady Income: Steady income counts to be the best advantage of owning a rental property. As monthly you will receive the fixed rent amounts deduct out the expenses and the remaining is the profit you will get every month.
  • Increase in Real estate price: Recently, there is a jump observed in the real estate business. The prices of the real estate keep fluctuating, but if you have done a bit of research about the area before buying it would help to know the future of the rental property.

Disadvantages of investing in property

As there are two faces of coins, this business also faces some failures or say difficulties which are noted as below:

  • Significant Responsibilities: With great responsibilities, there is an increase in tension and pressure and being a landlord is not an easy job to do. There are always problems faced during rent collection only a few good tenants pay them on time. Being the landlord of the property, you need to be present at the place if any emergency occurs. You will also deal with the repair cost, maintenance cost, etc. To encounter this problem, you can hire a property manager that will manage and take care of your property. But he will charge fees equivalent to 10% of the rent.
  • Selling might be tedious: The prices of your property might vary with the market conditions prevailing. So you always need to be updated about your rental property rates. You will also need to hire a real estate agent who will cost you and will reduce your profit. 
  • Dealing with routine and unexpected expenses: The routine costs include the maintenance bill, repairs, and upgrades if needed. Well, dealing with unforeseen expenses can be a tricky one to deal with. If you want to calculate a rough amount required for the maintenance and repairs in the rental property, then you can count 2% of your purchase property price as maintenance and repair expenses. There can be situations as the tenant leaves the rental property, then you will need to find a new tenant for your property.  

These disadvantages can be easily encountered if you follow the essential tips given above and be successful in your work.

What are the Average rents in Canada?

According to a study of Rentals.ca listings, the average rent for a two-bedroom home in an urban Canadian city is $1,918 per month. However, the rates differ according to cities, so some average rents for two-bedroom houses are as follows:

CityApartment Rent

(FOR 2 BEDROOM HOME) 

  1. Toronto, ON
$2,966
  1. Etobicoke, ON
$2,575
  1. Richmond, ON
$2,401
  1. Vancouver, BC
$3,058
  1. Oakville, ON
$2,591
  1. Mississauga, ON 
$2,416
  1. Burlington, ON
$2,212
  1. Brampton, ON
$1,843
  1. Victoria, BC
$2,081
  1. Barrie, ON
$2,041

        

Conclusion:

However, the above blog poses you with various opinions, but it can be concluded that rental property is not a deal to let go of. There are only some tips you need to consider before and after investing in rental property, but as you are clear with that, you will be successful in the rental property business.

 And don’t take tension about the disadvantages faces as the obstacles could be easily encountered with the help of these success tips mentioned above. And the decrease in interest rates and rise in the real estate prices puts rental property business to be the most profitable in the current time. 

You just need to take care of that you don’t need to work alone as it will cause you more tension and workload so you need only an efficient team that will work with you for more success in the business. Never hesitate to take help from MD advisors as their job is to help, and they will provide you with the best solution to your questions as per your need.