Vancouver Island Real Estate Information

With today’s low interest rates, buying real estate as an investment is becoming a very popular option indeed. If done right, real estate investments can be financially beneficial to you in a number of ways: property value can increase over initial purchase price, property can become a steady stream of income in excess of expenses, and with affordable payments at today’s interest rates and those payments applied against your mortgage, your equity can increase.

If you are considering an investment property, there are two primary strategies you can use: you can live in one part of the building yourself while renting out the other portion, or you can purchase a separate building altogether solely for rental purposes. The latter can be worthwhile but there are some tax implications. In Canada, secondary properties are taxable on any gain made from the sale of said properties. However, expenses incurred in readying the home for sale are often deductible. Whether it’s a principal residence or secondary, rental income less some operating expenses is usually taxable. Your first step in planning to purchase an investment property should be to investigate any income and tax laws. In some instances, there may be an owners grant which is applied to the property taxes of a principal residence but not to a secondary. I can help you decipher the current property tax laws in our area.

Now that you’ve decided on your investment strategy, start planning the type of return you want on your investment. With this in mind, I can help you “crunch numbers” by offering advice on mortgage financing options, the range of current rental payments, estimates of operating expenses, what you yourself can afford for mortgage payments, etc.

Now that you know what you can afford, start looking. You’ve heard the old adage . . .the three most important things when buying a home are: location, location, location. Even more so when searching for an investment property. Not only are you looking for a property that will increase in value, but also something that is appealing to long-term tenants. The best properties to consider are close to public transit routes and easily accessible to major amenities. I can help you identify neighbourhoods with good investment property potential.

If you have decided to rent out a portion of the home and live in the other, I can help you find homes that will be suitable to your needs. Many homes for sale will advertise that they have an in-law apartment, or granny flat. Although the space functions as a separate unit, the property may not be zoned to use it as a legal income apartment. You can rely on me to advise you on zoning, and safety requirements before you make that offer.