Finance Articles

Buying An Investment Property

The purchase of an investment property offers challenges and opportunities. If you have considered buying a rental property, this overview will provide you with some valuable guidance.

Investment Property Challenges

Current and prospective owners of rental properties in Canada have faced some challenges over the past several years:

? Markets have declined somewhat as economic conditions have allowed traditional renters to purchase their first home.
? Having sustained losses in the 1980s, many lenders are unwilling to lend on negative cash flows.
? Mortgage insurance premiums for rental properties have increased.
? Changes to income tax policies have eliminated or reduced some of the advantages of investing in rental properties.

Investment Property Opportunities

Despite the challenges, there are many reasons for investors to feel positive about the rental sector:

? According to the Canadian Mortgage and Housing Corporation (CMHC), the demand for rental housing is expected to grow by 50,000 units annually until at least 2020.

? Competition among real estate investment trusts and real estate companies with expansion plans is expected to increase the value of existing properties and lead to new construction.

? Most markets show good potential for conversions of single-family homes to multiple rental apartments.

Financing an Investment Property

There are many considerations to be made when weighing the options for financing rental homes.

? Most lenders will not lend more than 65% of the property?s appraised value or purchase price (whichever is lower). A mortgage broker may be able to help you find alternative financing at more favorable terms.

? You may be able to find a lender who will offer 75%, but you will need excellent financial health and a property that is in a ?good? area.

? Mortgages greater than 65% will need to be insured. It used to be that CMHC would offer insured mortgages of up to 85%, but in December, 2007, they announced a new program offering up to 100% loan-to-value ratios on rental property purchases and 95% on rental property refinancing.

? Lenders will require that the rental income be able to cover the majority of the property?s operating expenses, including the mortgage. If rental income cannot cover expenses, you must have enough personal wealth to make up for the shortfall.

? When considering how expenses are covered, lenders will look only at legal uses of the property. If you have an illegal suite, its rent will not be considered.

Ensure You Can Make Money from Your Investment Property

The key question for anyone looking to buy a rental property is ?Can I make money?? To answer this question you need to do some research.

Find out what you can charge for rent in the area. Check with real estate agents, other investors, or rental listings for the area. Then deduct expenses to calculate what your income will be. Expenses include mortgage, taxes, utilities, insurance, maintenance and, if applicable, property management fees.

If the rent cannot cover the expenses, the investment may not be a wise one. You could wait years for an area?s property values to increase and by then you could be in major debt.

For more information on investment home financing or investment property lending contact a CMI mortgage specialist.

Other Article Sites

findabook.com  moneycd.info  a-mortgage.info   about-lemon-laws.info  aboutstudentloans.info
all-about-publishing.info  auctions-articles.info  bestcollege-university.com  bestispconnection.com
biblefolder.com  blogger-website.com  books-used.info  brokers-guide.info  buywindows.info  cable-dsl.info
career-miner.com  carpel-tunnel.info  cashinaflash.info  cashloanreviews.info  casinobell.com  chat-house.info
clearmycredit.info  collegeloantips.info  crones.info  depression-articles.info   dirnic.net  dishguides.info
divers-below.com  expodog.info   financewizz.com  fire-insurance.info  getgood.info  handleit.net   it-idea.info
health-supplies.info  hosting-right.com  insidealert.com  insurance-facts.info  jobs-employment.info
justgood.info  lookgold.net   lowcost-travel.info  money-source.info  myhostzone.info  numisblog.com
peoplesearchfinder.info  pr-articles.info  realeas.com   refinancing-guides.info  spyware-remove.info
telelot.info  the-law.info   toppaid.info  travel-deals.info  travelcorrect.com  wedding-guide-site.com
your-blog.info  your-credit.info

Forensic Accounting The Detective Breed of Accounting Careers
When you ask people to give you a list of exciting careers, accounting is never near the top. The accounting career field tends to draw the sedentary folks: steady, analytical types who value security above all else. You're basically there to keep the wheels of business turning; a plumber directing the flow of money instead of water.

Canaan Partners Leads Investment in India-Based techTribe
Canaan Partners with The Entrepreneur's Funds and Miven Venture Partners to drive growth of global career networking company.

New Reverse Mortgage Loan Discounts and Settlement Guarantee Offered by Next Generation Financial Services
?Industry first discounts from Next Generation Financial Services give seniors peace of mind.

Oppenheimer Investment Management Selects Satuit Technologies as its Customer Relationship Management Provider of Choice
SatuitCRM helps Oppenheimer Investment Management or OIM focus its institutional investment marketing and sales efforts for best results. OIM selected SatuitCRM following a thorough evaluation of a half dozen competing CRM solutions over several months. A key driver of the decision for OIM was the fact that, unlike other CRM solutions that proved to have limited reporting capabilities, hard to use configuration tools and were more costly, SatuitCRM was designed for the asset management industry with out-of-the-box functionality that closely mirrors the way the industry works. This enables OIM to quickly utilize the application resulting in a rapid Return-on-Investment (ROI).

Mortgage Rates - Something Better Than Shopping For Rates
Is it possible? Something better than getting the best mortgage rates! Yes. I know it?s surprising and that it goes against what everyone says but it is true and?

Mortgage Life Insurance: What Is It?
Mortgage life insurance is an insurance policy that is taken out by a home buyer to protect the lender in the event of a death. When a borrower purchases a home, a lender in most cases protects itself with mortgage life insurance on your life. This is commonly the case unless a down payment of at least 20% is made.

When Is A Self-Certification Mortgage Appropriate?
A self-certification mortgage is a home loan product designed for borrowers who may not be able to prove their income through traditional means such as tax records and pay slips They were first made available to self employed individuals who could not produce the documentation required for a standard mortgage product from a high street lender

Commercial Finance Program Blows the Roof Off "Ugly House" Investing
Real Estate investor training goes to a different level with this commercial finance program. This commercial finance training is a home-based business that goes beyond "We Buy Houses."

The Secret of Self-Investment
"Success is about who you become. The big challenge is to become all that you have the possibility of becoming. You cannot believe what it does to the human spirit to maximize your human potential and stretch yourself to the limit." -Jim Rohn

Mortgage Loans - Move In Right Away
So you have found the house of your dreams and you need finance fast before it slips from your fingers? As opposed to traditional mortgage loan lenders, there are online home loan lenders willing to approve a home loan in a considerably shorter period of time and with significantly less requirements. Learn that getting a home loan without delays or hassles is really possible.

Car Finance Products That Are More Customer-Friendly
Many Brits are finding greater access to car finance options that are affordable and filled with great benefits Rates for car loans are extremely low right now, especially for borrowers with excellent credit

Finance And Investment In Los Angeles, CA
The locus of downtown Los Angeles is the Financial District, situated near to the construction at Bunker Hill. The district is mostly comprised of corporate office skyscrapers, hotels, banks, law firms, and real estate organizations.

Obelisk International Announces its Latest Investment Opportunity: Alpine Lodge in Bansko, Bulgaria.
Obelisk International launches Alpine Lodge: a four-star ski and golf apartment resort in Bulgaria's most popular ski resort, Bansko.

Dolce And Gabbana Handbag: A Good Investment?
There are many reasons as to why Dolce and Gabbana handbags have pretty much taken over the designer handbag industry. Sure, they have some competition, but when it comes down to it there are not many better options.