Investing your hard-earned money into something can be a tricky affair. You never know whether you will gain from it or will you will lose your money. However, some investments worth taking up a risk, such as investing in real estate.
Many people have the sentiment of why renting a house if they can afford to buy it. Buying a property will not only become one of your secure assets, but it may also become a source of income for you if you are not going to use it as your home.
If you are looking for a property in the Greater Montreal Area first, consider your residential status. It may vary in two different ways. Either you are a permanent resident of Canada and looking for a property or staying elsewhere for professional purposes. You are looking for a means to utilize your idle money by investing in real estate.
In both cases, the approach should be different. So rather than being fully self-dependent, you should consult with an established property management firm.
These professionals are experienced and well aware of the market situation, and they can guide you well in this matter.
However, if you want to have a basic idea about the pros and cons of buying a rental property, then we are here to help you get a clear picture of it.
First, let’s look at the benefits you will gain if you buy a rental property in the Greater Montreal Area.
Pros of buying a rental property –
Having an asset
Buying a house means you are adding an asset to your financial statement. It makes you financially strong, and this is something on which you can depend if you are ever in any major financial crisis.
A potential source of income
Many people buy houses and then rent it out to other people. Renting out properties becomes a source of income. However, you also have to keep in mind that there may not be a continuous flow of income from house rent as your house may not have tenants throughout the year. But it still it is a pretty good option for passive income.
Owning a house comes with many added expenses, like property taxes, insurance premiums, maintenance costs, various utility bills, etc. So, if your expense on the house property exceeds your income from house rent, then the amount of loss that you will suffer will be reduced from your other income. This will lead to less payment of taxes to the government.
Chance of growth in property value
In the long-term, your property’s value increases, maybe due to the development of its locality, and you will gain a lot from your house.
If you have rented it out, then also you can increase the amount of rent, and even if you decide to sell it, at any point, then you will get a lot more than the amount with which you had bought the place.
Now, let’s check what hurdles you can face.
Cons of buying a rental property –
Without having strong financial stability, entering the real estate market will not be an intelligent decision. You should have a ready fund of a minimum of US$25,000, as in most cases, you have to make an instant payment of at least 20-35% of the property’s total cost. So, having financial support is essential.
Your work does not end at only purchasing it. There will be recurring expenses for maintaining the house. So, you should have a steady source of liquid cash.
Buying a rental property seems like a sound investment plan, but it involves a lot of pre-planning and post-maintenance hazards.
If you want to avoid all this pressure, better visit a property management firm, take up all your responsibilities, from maintaining it to collecting rent, and finding out suitable tenants for your house.
The only thing you have to worry about is taking up the financial pressure. If you are confident that you are financially ready, then you should definitely go for it.
MTL GROUP is a property management and financing company, operating in the Greater Montreal area in Quebec. Our professionals are just a phone call away to assist you with your property management and financing needs.