Rental properties

      Guidelines for purchasing a rental property in BC are different than purchasing a vacation property so one must be clear on the use of the second property. A rental property is a property whose sole purpose is to generate income while a second home is just that, a second home to be used by you for recreational purposes etc.

Some financial institutions will lend up to 95% Loan To Value and potential rental income can also be used to help you qualify for your rental property.

Now as far as qualifications go, it is a requirement that the revenue from the property takes care of the majority of the operating expenses of the property which includes the mortgage payments. If the property is unable to service the expenses, then you personally must have the financial ability to cover the short fall.

It's important to know that the income being generated by the property must come from a legal and permissible use of the property. For example if you purchase a home with an unauthorized basement suite, then the income being generated by that suite will not be included as part of the properties ability to cover the operating expenses.

Avoid paying Insurance

     If you are looking to buy a rental producing property in BC and would like to avoid paying the mortgage insurance you will require 25% down payment.

Approved Rental property Types:

     Single Family Dwellings-Town Homes-Condos-Duplexes-Triplexes-Fourplexes

What to look for when purchasing a rental property in BC

     When looking for a rental property in BC you should check out the local area. Check with realtors and in the local papers or on Craigslist to determine what amount of rent can be charged for the area.

Make sure when purchasing your BC rental property you have adequate money to cover any additional costs. Repairs or improvements are a necessary when ever considering purchasing a income producing property don’t under estimate or you may be put in a possession of selling abruptly.

Make sure your BC rental property will cover all your costs. Mortgage payments, insurance, Maintenance and other associated costs are usually factored into a decision when estimating what your renters will need to pay to cover your mortgage. Make sure vacancy rates are factored into your estimation of costs.

Most importantly if this is your first rental property get a home inspection. Sophisticated landlords know the key to making a good rental properly decision is getting a home inspection before buying.

As well make sure you deal with a professional accountant to understand all tax advantages that apply to owning a rental property.