Rental Property Investing - 5 Steps to Get Started.
If you're thinking about investing in rental property in Toronto, here the first 5 things you should consider.
Step 1 - Figure out what type of rental property you are best suited to own. There are a lot of different types of rental properties out there such as single family homes, small multi-family properties and large multi-family, commercial properties, vacation rentals and so on. It's good to narrow that down and pick one type of property to start with so you can dig in deeper on understanding it, read more books on that topic, listen to podcasts on that kind of property to get clear and to get fully focused.
Step2 - Choose the real estate market you're going to invest in. You don't always have to invest in your own backyard but when you're first starting out being close to the property makes it easier if you can drive to the property when any issues arise or to simply check in on your tenants.
Step 3 - Do your homework and seek to understand as much as possible about that market. Speak to local real estate agents, talk with lenders, talk with property managers in the area. Are there other local investors that you can talk to to get an understanding of their experience in that location and the type of tenants they have dealt with?
Step 4 - Get the best financing for your property. There's so many different ways to finance deals such as conventional loans to portfolio loans and commercial loans to private loans using a partner to help you finance and so on. The key is understanding what all these financing options are so you can best fit the financing strategy that’s best for you and the type of property you plan on buying.
Step 5 - Start analyzing possible purchase deals. This is where your local real estate agent can help you the most. In three simple words.. math overcomes fear. The more you understand the deal structure the more confident you'll be pursuing actual good deals when they come up. Simply find that deal size that fits you and then pursue it. You know if your goal is $500/month in positive cash flow then figure out how much you can pay for a property to get you to that level of return.