Here’s How to Find the Right Rental Property for You
If you’re interested in purchasing multiple rental properties to generate income, there are a number of considerations to make first. Finding the right rental property for you often involves a healthy combination of luck, good timing, and adaptability. But that doesn’t mean it can’t be done.
Over the years I’ve had a number of clients with a surprisingly big rental portfolio. Actually, I still do. In Vancouver where many are struggling to afford their first home, even the idea of owning multiple properties seems impossible to most. Not so. In fact, a number of savvy investors out there built impressive portfolios the old-fashioned way–one property at a time. For those who did buy multiple properties at once, well, what can I say? Good for you. Maybe our paths will cross one day. Until then, here are a few pointers to get the rest of you started:
MULTIPLE RENTAL PROPERTIES ‘OUTSIDE THE BOX’
So you want to buy multiple properties but you’re not sure exactly what or where? You do know that you don’t want to manage all over the city; you don’t have the time or the patience or the gas money. What are your options?
DIVIDING A HOME INTO MULTIPLE SUITES
A home sectioned off into different legal suites presents a wonderful opportunity. Not only is it considered multiple rental properties; it comes without the headaches (read: expenses) associated with condo units. Not only will you forego condo fees, strata fees, heat, repairs and maintenance, you have the extra advantage of all your properties being in the same location.
A client of mine recently purchased a home in east Van. The purchase price was $1.7 million and it was subdivided to include 2 rental suites. We posited that he could earn a total monthly income of $3k from the two rental units. With his mortgage payment of approximately $4300 per month, this became an attractive opportunity.
GO COMMERCIAL ON MULTIPLE PROPERTIES
In a recent blog post, ‘Saying ‘I do’ to Commercial Real Estate Investment’ I talked at some length about the upsides of this venture. One of them is that it is often easy to find multiple rental properties in the same location. It may not feel glamorous to be the landlord of 3 units in a strip mall but…the financial freedom it has the potential to provide sure will.
To paraphrase my blog, a few of the most positive aspects to owning commercial real estate in general include:
- Tenants in commercial or industrial properties are less likely to break their lease.
- Increased security. Your tenants have invested everything they have in making their business work; they don’t want to leave any more than you want to ask them to go.
- Commercial and industrial leases are usually for longer periods than residential leases.
- Tenants are responsible for taxes, utilities and maintenance.
TALK TO A BROKER WHO THINKS OUTSIDE THE BOX
A good mortgage broker is a bit like a great chef. Even with few ingredients and limited tools they can put together just the right combination. Not only will a great mortgage broker help you cobble together your lenders, they can provide ideas about how to build a portfolio. In my experience, the ability to think outside the box is key.
Whether you’re a Prada-clad professional looking for your first industrial property, or a seasoned veteran of the take-no-prisoners Vancouver real estate market, I provide unique problem solving and creative solutions to help you build the property portfolio you’ve always wanted.