08 Jan Should you Invest in a Rental Property in Kelowna?
Purchasing and investing in rental property has a number of advantages, especially in Kelowna’s growing economic state. However, rental property also requires a good foundation of property knowledge, and responsibility in order to succeed.
Speaking with a trusted and recognized mortgage broker will be a huge asset in understanding how a rental property will influence your tax and financial situation.
The key advantages:
- Monthly income and long-term financial security
- Low vacancy and increase in rent
- Booming development & economics
The key disadvantages:
- Landlord responsibilities
- Property taxes
Advantages of Kelowna Rental Property
1. Monthly income and long-term security
Securing a steady monthly income that can lead to long-term financial security is the greatest advantage of investing and owning rental property. It can be the key to a great deal of profit and financial freedom if you do things the right way from the start.
Consider the state of the property and the size. A smaller property will be easier to maintain and upgrade over time.
A fixer-upper can be a good investment if you’re prepared, and know exactly what kind of repairs it requires. A proper home inspection, before purchasing a property, is an excellent way to negotiate with the sellers and keep your finances in check and help pay off your mortgage.
A separate suite in your family home is another way to invest in rental property while paying off your mortgage.
2. Low vacancy and increase in rent in Kelowna
Kelowna has one of the lowest vacancies in Canada, which means there is a greater opportunity for tapping into Kelowna’s rental community.
Furthermore, with so many new residents moving to Kelowna, the need for housing will continue to increase, and so will rent prices. Updated housing will help fill rooms, pay your mortgage, and leave you with leftover cash.
3. Booming Development & Economy in Kelowna
Kelowna is one of the fastest growing cities in Canada. It’s no longer just a vacation and retirement destination. Economically, there is a growing business sector with a huge entrepreneurial community. Families and professionals are moving here at a fast rate, and there’s no sign of slowing down.
Disadvantages of Kelowna Rental Property
1. Landlord responsibilities
Purchasing the right property, maintaining it, and dealing with tenants can be challenging. If you’re prepared to put the work and time into your property and tenants, it will pay off.
Keeping your property well maintained will attract better tenants. Screening for responsible, long-term tenants is one of the greatest keys to making a profit.
On the other hand, irresponsible tenants can cause serious financial damage. Underestimating the costs of repairs, ongoing maintenance or a tenant that doesn’t pay, will lower the worth of your property and cause you to lose funds.
There are ways to save and prevent these pitfalls. Read the blog on Seven Ways to Save Money as a Landlord for tips.
2. Property Taxes
Property taxes should be taken into consideration when you’re buying any property. Keep in mind that property taxes can increase, so consider the neighbourhood in Kelowna that you want to purchase in. Adjusting the rent over time can help you stay on top of these fluctuations. However, certain neighbourhoods will be a better investment, so do your homework on property taxes throughout Kelowna’s communities.
3. Financing the Initial Property
If you’ve already purchased a property that you and your family reside in, it needs to be taken into account when you’re considering a second property. We want to make sure you achieve your long-term goal of securing a lucrative monthly income long-term. At John Antle Mortgage, we can help access and provide you with a specific budget that you can afford with the pre-approval mortgage process.
With the right guidance, you can learn if you qualify for cost deductions, or what you can do to qualify. At John Antle Mortgages we focus on providing you with the right guidance to make the best choice for you. We are qualified in guiding you through your inquiries when purchasing a mortgage that works for you. Our goal is to provide you with the tools and a mortgage that works for your unique situation.