With property appreciating at incredible rates in the lower mainland, many are now looking to expand their real estate portfolio. Here are three things that should be at the top of your checklist:
Location is prime especially when you’re looking to make money. It determines the amount of potential rent that you’ll be bringing in as well as the future appreciation of your investment.
Ideally, you will be looking for a neighborhood with access to plenty of amenities when thinking of renting out your investment. Distance to transportation, schools, parks, restaurants, shopping centers are all cases in which you need to search for. Also look at the community plan and see if there is potential for future transportation, schools, libraries etc that’ll enhance the value of the property even more in the future.
And of course, the better the location, the more you’ll be paying upfront. So try to look for a neighborhood of potential to give yourself an idea of the long-term picture.
Make sure your numbers make sense when looking at an investment. When purchasing, look at your downpayment, your monthly payments and see if your rent will cover this and perhaps gain you a profit. In the Vancouver-area you’ll probably be looking at a 3% return of investment on a per year basis without appreciation (with appreciation you might just be lucky and hit 40% like Coal Harbor, downtown last year).
Maintenance is also a key factor, as it’ll depend on what type of home you’ll be purchasing.
Condos/ Townhomes: Try to get a condominium with a safe contingency fund and a fair maintenance fee. If it’s too low you might run into special levies in the future or if its too high, the strata may be experiences constant problems with the building. Therefore, you’ll really want to read over the strata documents and see exactly what you are getting into.
Detached Homes: Pay attention to the build of the home and see if there is any damage or anything out of place that may lead to expenses in the future. Also walk around the property and look at potential structural damage that you’ll need to fix. An inspection is always a good idea to ensure that you don’t put yourself in a hole of future expenses.
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