Investing in real estate is an excellent way to work towards living with financial freedom. In Canada, one of the best ways to garner long-term monetary success is by purchasing an apartment building.This type of multi-unit investment, though a popular choice for buyers, is not something to be done on a whim. It takes time, research and planning to ensure that the building you buy is one that will provide you with the greatest outcome financially. Here are a few things for both experienced and novice investors to consider before purchasing a building.
When beginning the hunt for your building, choosing a location that will work best for you is essential. A few things to consider to ensure you maximize your return on investment are crime rates, amenities, and which neighbourhoods are the most desirable. It is important to note that buildings can have the same builder, and same design, but because of different locations, the buildings will come with different price tags.
If you have ever purchased a house, you have likely heard a thing or two about walk scores. Broken down, the lower the walk score, the more residential the neighbourhood is. The higher the walk score, the more amenities in the immediate areas. While there is no one perfect walk score, it is important to get something that fits the needs of your target market, and meets the vision you have as a building owner.
If you have a lot of renovation or maintenance to do, your building could end up costing you a lot more than the ticket price you see. Set your expectations ahead of time; If you are looking for a turn-key building, you will want to limit your search to just that. However, if you are looking for something to fix up or flip to really maximize your return on investment, your search criteria can be much wider.
As with any property you are looking to buy, price is a huge determining factor. Know ahead of time what you can afford, and where to look. Price and location are very dependent upon each other. Speaking with your REALTOR ® about what is available in your price range will give you a good idea about where to look within the city. Go beyond the ticket price by including any maintenance, heating, and electric costs to ensure you are prepared for what the total monthly cost of your building will cost you at the end of the day.
When considering the purchase of a building, the number crunching begins. Get the information you need on occupancy rates, cost per unit, and rent per tenant. Having an idea of these numbers will help you to know how healthy of a purchase this will be, and what you can expect to accrue.
When purchasing an income property, even if you are a first time home buyer the down payment will have to be a minimum of 20%.This may seem like a lot of money, but with down payments over 20% there is no obligatory mortgage insurance added to your monthly payment. As with any large real estate purchase, to ensure you get the best possible interest rates available to you, speak with a broker and do the necessary homework.
Buying buildings in the beautiful city of Ottawa can be a very lucrative opportunity. Reach out to me today so that we can discuss how you can move forward and become a successful real estate investor, and work your way towards securing financial freedom.
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