Investing in residential property can be a very wise move. Whether you want money for retirement, to diversify your investments, or looking for a new career, residential properties offer many options. If you’re interested in residential investments, you should continue reading for 6 tips on investing in residential properties. It’s always best to be prepared beforehand so you know what to expect.
The Price Matters
If you’re able to find a great bargain, it can help bolster you against fluctuations in the market. You can’t always guarantee that you’ll have renters, and you’ll be making payments whether you’re seeing a steady stream of income or not. Having manageable payments enables you to ride out the downturns in the market, and you won’t always be dependent on having renters simply to keep the property. Not only that, but you’ll see better returns on your investments when the market is doing well.
Know the Regulations
Be sure that you know all applicable regulations. For rental homes in Toronto, Ontario, there may be minimum ceiling heights, minimum square footage for bedrooms, and other details that will impact your property. You’ll likely need to bring your property up to code to meet local regulations, so you should budget and plan accordingly. Rental properties are treated as a business, so you won’t be able to save money by doing the job yourself. Contractors will have to be hired, and you’ll have to apply for and acquire any necessary permits. The same is true for parking, not just the housing itself. Parking regulations for residential properties differ greatly compared to commercial buildings. Be sure to have enough space, and budget for any changes needed for parking.
Have the property inspected, and make note of any potential safety issues. As the owner, you are responsible for making sure that all safety regulations are met. Hazards such as steep steps, cracked sidewalks or driveways, unfenced swimming areas or obstructed doorways are all issues that should be resolved. You’ll need to bring the property up to code and ensure that all safety hazards have been resolved. The cost of this can vary greatly, so it’s a good idea to budget accordingly.
Stay on Top of It
Absentee landlords tend to respond to problems more slowly, and that allows issues to become bigger, more severe, and costlier. Additionally, you have to remember that people talk and reputations tend to spread. If you allow issues to snowball, you may have a much more difficult time finding tenants in the future, and that can mean you have empty properties costing money but not making any profits.
It’s best to keep any construction needs simple and ultimately more affordable. You may find a gorgeous home that you’d love to own and convert into a rental property, but it’s not always easy to find contractors and materials for the work. While shingles and drywall are relatively easy to manage, older windows or a fancy facade might not be as standard to accommodate.
Be a Good Neighbour
The neighbourhood is very important, and while ritzy areas might seem like a good idea, you may have difficulty finding tenants or have higher property expenses than you anticipated. High crime and high poverty areas can also be problematic, and you may find that you spend a lot of money on repairs or have a high turnover when it comes to tenants.
For residential properties in Toronto, Ontario, you can probably find great deals in good areas if you look carefully and keep your expectations reasonable.