Tag Archives: Buying

Owning An Investment Property, Adam Hawryluk, Mortgage Specialist

The Simple Hack To Owning An Investment Property

Many Canadians dream of one day owning an investment property. Unfortunately, in the face of tightening qualifying regulations and the significant down payment required to purchase one directly (20% minimum for rental purchases) most feel it is difficult turning that dream into a reality. Despite this, there is good news! Thanks to savvy investors, there is straightforward process to side-step most of these big hurdles.

Owning an Investment Property

Step 1: For Your First Home, Buy with Your Head, Not with Your Heart

As a real estate investor, you want to make sure the first home you buy (Home #1) will eventually be suitable as a rental property. Because this home is bought for you to live in, you can purchase it with as little as 5% down payment, using CMHC mortgage default insurance. Don’t buy Home #1 solely because you love the neighbourhood, or because it is close to your work, as future renters may not value these aspects as much as you do. Consider up-and-coming neighbourhoods, which may allow you to purchase a property at a better value with the option of renovating as you live in it, if necessary. Work with your REALTOR® to maximize this value and lean on them for their expertise.

Step 2: Start Saving for Home #2

The key here is to take your time gathering your money for the down payment on your next home. Because your plan is to eventually move into your next home, you can purchase future Home #2 with as little as 5% down payment as well (or save up the 20% to avoid another default mortgage insurance premium). If Home #1 has increased significantly in value since you purchased it, you may be able to tap into some of it’s equity to help bolster the down payment for your next home.

Step 3: Qualifying for Home #2

Using the down payment you’ve saved up or the equity in Home #1, find out how much of a mortgage you can qualify for with your next home. Note: not all banks/lenders use the same formula to determine this dollar amount. Since Home #1 is going to turn into a rental property, lenders will use an appraiser to determine how much rental income this home can expect to earn each month since nobody can expect you to have a signed lease in place while you still live there. That determined income is then considered into your financial picture to calculate your maximum purchase amount for Home #2.

Step 4: Buying Home #2

If your goal is to have one rental property and one home for yourself, you can then look at this property through the lens of what would be ideal for you. Again, work with your REALTOR® to determine the neighbourhood, schools, facilities, layout, etc. that works best for your situation. If the intention for this property isn’t for you to live in forever, start back at Step 2 again and start saving!

The key to owning an investment property and buying homes in this manner is that the intention MUST be for you to live in them. This is not a “*wink-wink, nudge-nudge* suuuure you’re going to “live in this house” *wink-wink*”  shady type situation. CMHC has rules about your intentions for the property and how long you must reside in it, as does any mortgage lender for the property. All these people have in common is that they don’t plan on being in that property forever. Their time-frame may be three years or thirteen years, but they buy Home #1 with the thought in the back of their mind about how well it will function as a rental property in the future. The hardest part is actually BEING a (good) landlord, but that’s another post of its own.

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Consumerism can very generally be defined as a preoccupation with and inclination toward the buying of consumer goods. There are other interpretations as well but to simplify it – we work more, to earn more, to spend more.


While there are different types of consumerism, the decision to buy a home falls into the category of “purchase with a high amount of decision making”. These types of purchases are usually unfamiliar and expensive and the items are bought infrequently – cars, homes, or computer systems for example. The buyer often invests a significant amount of time gathering information before committing to the purchase because there’s a high degree of risk financially.

Buying a new home

When looking at scaling down, you’re going to spend a lot of time on that decision. What items can you not live without in a smaller home, and what can you easily dispose of? If you’re at a place in your life where you don’t want to worry about so much “stuff”, you’ll need to be honest with yourself in your assessment and get rid of whatever is surplus or not used.

Is your new home move-in ready or are you going to do some renovating. If you’re renovating, will you consider the type of materials you use? Are they environmentally friendly, are they sustainable? Are they durable or will you end up replacing them again before long?

Informed purchase with your home

To avoid falling into the consumerism trap, you’ll want to make sure your decisions are made based on as much information as possible. Are the materials going to last or will you be replacing it all again in a few years? This can apply to both the house structure itself, as well as the fixtures and fittings inside. Can you lower your impact on the environment by using more energy efficient items or fixtures that help reduce your water consumption?

Give careful consideration to the purchases and investments you make. Evaluate whether or not they are a necessity or a luxury, the origin (how it’s made and where) and what impact it may have on the environment. Then make your decisions based on what best meets your needs, in the most economical way.

If you are considering moving, call one of our expert agents today at RE/MAX of Nanaimo at (250) 751-1223. They can help you find exactly what you dreamed of when you first thought of scaling down.

Technology Advancements In Real Estate

There was a time when real estate agents were the gatekeepers of all property information. Buyers would have to come to their agents with a list of their wants and preferences, and the agents would line up suitable options for them to look at. Let’s take a look at how technology advancements in real estate effect how home buyers look for homes.

Home buyers

These days, most prospective homebuyers do much of their own research online. Not only are they coming to REALTORS® with specific homes in mind but they have often done the research about which areas have the best schools, amenities and lowest crime rates as well. On one hand this sounds like it makes the REALTORS® job easier, but in some ways it does the exact opposite.

The real estate market is highly competitive and for agents to succeed they have to be constantly coming up with new and improved ways to get the attention of prospective homebuyers, by using the internet and social media in particular. The latter is a powerful way to keep existing clients informed and to catch the attention of new ones on a global scale.

Mobile technology for REALTORS®

Mobile technology itself has had a positive impact on the daily life of the average real estate agent. For example, these days with the use of laptops, tablets and even wireless printers, REALTORS® can do much of their work in the field. They are no longer chained to their desk or paper files, which means more time to spend with clients and more time researching and visiting homes for sale in person.

Handheld devices, often cell phones, can be used to take both verbal and text notes while also storing and filing photos of properties and anything else that the buyers would like to see.

There are also software programs developed specifically with REALTORS® in mind. Some will help manage appointments, while other systems provide comprehensive mobile marketing platforms that can be used by the entire team.

Technology advancements in real estate

As you can see, while current technology is adding to the competitive nature of the business, it is also simplifying it. There is more to consider and manage, but it has never been easier to keep in touch and up to date with prospective homebuyers.

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