The GTA residential real estate market is really heating up. And without any signs of slowing, boasting market conditions that continue on a favourable trajectory, many people are considering investing in a potentially profitable and rewarding residential rental market. However, before diving headfirst into these competitive and sometimes complicated waters, top RE/MAX agent Riaz Ghani shares four things most people don’t know about investing in the GTA residential real estate market.
1. Buying the right property is often a bigger challenge than managing the property over the long-term
It’s wise to think beyond the price of a property to consider all of the costs and potential revenues in order to properly assess its potential return. Evaluating things like condo fees, taxes, required maintenance and your desired rental income will help guide your decisions.
There are so many things to consider when determining the best property to purchase. This is why Ghani says that buying the perfect investment property is often a bigger challenge than managing it over the long-term. If you choose the right property in the beginning of your investment process — one that doesn’t require any major repairs, won’t require a lot of maintenance over time and will attract high-end tenants — you can save hours of time, limit your stress and maximize your investment.
Ghani aims to help investors find the perfect property that will offer a ROI of at least 25 percent and a rental yield of four percent. He also offers to manage properties free of charge.
2. You need to consider three kinds of taxes
Digging into the numbers a little further will allow you to become familiar with the three kinds of taxes that you’ll need to pay as a property investor. They include Land Transfer Taxes (Provincial and Municipal types apply if you’re buying in the City of Toronto), Income Tax on the rental income and Capital Gains taxes which are to be considered if and when you sell the property.
3. While equity is important, don’t ignore cash flow
The ideal investment property will combine positive cash flow (rent minus expenses) and strong build up of equity (the mortgage that you’re paying on the property each month). If you invest in the right property, the payoff in terms of monthly profit and consistently increasing equity can be significant.
4. You need to understand near and long-term property appreciation rates
The GTA real estate market has been red hot of late, with the annual appreciation (the increased value of your property during ownership) of condos, townhomes and houses going through the roof. However, understanding the potential appreciation of your investment property can be tricky.
Consulting with RE/MAX’s Team Riaz Ghani can help you better determine near and long-term property appreciation.
During an unprecedented time of opportunity within the GTA residential real estate market in Mississauga, Oakville, Brampton, Milton, Toronto and other areas, let RE/MAX’s Team Riaz Ghani help uncomplicate the decision to invest and start profiting from a rental property today.