Buying Toronto Real Estate as a Retirement Strategy
An increasingly popular strategy among prospective downsizers is to buy a house or condo and rent it out until they themselves want to move in. Toronto mortgage broker David Smith of Oriana Financial says, “We do see this. More and more (mid-life couples) are buying investment properties.” Smith says that as much as 80% of the purchase price of a rental property can be financed. When rented, income from the tenant can help carry the mortgage and taxes. With Toronto houses and condominiums appreciating at a rate of 3 to 10% per year, income properties are a “powerful investment tool”, says Smith.
Becoming a landlord requires some effort. An income property needs to be well-located, attractive to renters, and eventually, a pleasant place for you to live. Prospective tenants need to be vetted for stability and ability to pay. Be aware that the property should be “elder friendly”. You don’t want to invest in a multi-storey house only to find that you can’t get up the stairs!
If this type of investment appeals to you, your real estate agent can educate you about income properties currently for sale. They can perform a market analysis to determine what level of rent is appropriate. In the end, the best informed property buyers are the happiest with their purchasing decision.