Buying an Investment Property - a.k.a How to go from average to rich
Because you are a smart, sexy, intelligent and successful human being, you have now acquired enough funds to further your life by adding another income generating property to your wealth.
When looking for an investment property, rule number 1 is NOT TO GET GOT.
Things to know when buying an investment property:
DO YOUR MATH
Ask any realtor to check how much comparables in the building / area rented for
Make sure you can actually make a profit or that the area is going up rapidly in price
KNOW YOUR COSTS
Mortgage payment / month
Typically $0.70/sq foot of condo
Check with the realtor
Typically $20/month for a smaller condo
Hydro (factor this in for months when your property is untenanted)
Is there a university nearby?
Is it close to the financial district / area with many rich bankers & developers?
Is there high rent demand (there almost always is in Toronto since many people got caught in the rent trap already)
If you have successfully analyzed the 3 points above, then congratulations, you have found an imperfection in the market and can now take your money to make even more! :D
Since 2 years ago, there have been many news articles similar to the one below:
(Source CBC: http://www.cbc.ca/news/canada/toronto/rent-toronto-condo-tenants-1.4054056)
It has been no surprise that Toronto's rent has taken off and gone way way up with bidding wars on multiple units. Some people saw the news and got upset waiting for a crash, while others decided to start number crunching to find that you can now buy a condo, rent it, and have the renter pay off your mortgage + money in your pocket monthly.
Something to ponder: Condo prices may crash historically, but how often does rent price go down?
If you took Finance / Economics and didn't become a banker, this might be the time to put that knowledge to use (yes, I graduated with that degree -_-)
MAKE A SPREADSHEET of each property you see
FALL MARKET sees huge rent demand (university students starting school). Time your closing in line with July / August / early September
ACT QUICKLY if you see a good deal
and always always remember rule #1 - don't get got, you get.