If you are planning to invest in real estate market in Toronto, and wish to make money, you need to know some of the basics of this market. People have been making money by buying, renting, flipping and selling properties in Toronto. Below are the basics of financing one need to be aware of before jumping into the real estate market. You can also buy preconstruction projects with great vaule like M City Condominiums By Rogers Real Estate, A big company launching project of over 1.5 Billion Dollors.
This is a very tricky matter in the Canadian real estate market. if you are aiming to get a mortgage for second property, it won’t be as easy as it might have been for your first house. You will be required to make atleast 20% of the price as a down payment and only a small chunk of the income you expect to receive from rent will be considered eligible for the repayment of the mortgage. This gets even tougher for commercial properties. A down payment of 50 percent of the total cost is required.
It is very important you talk to a well knowing person in understanding the taxation rules for real estate in Canada. If you have purchased a property for investment purposes, the rent earned by that property is considered as income and is liable for taxation. If your property faces any value increases from the time purchased it to the time you sell it, these increases will be subjected to capital gains taxes.
It is important to know that investing in real estate property requires patience and time for fruitful returns. If you want quick results and good profits in short time period, real estate is not your area. A property needs time to have a good increase in its value.
How to make money
There are three ways to make money in Canadian real estate market.
- Cash flow. This refers to what you spend and what you get. You invest in a property and then give it on rent. You still have to bear the maintenance and mortgage costs. If your rent is more than your expenditure, you can earn easy money on monthly basis.
- Appreciation. This means the positive difference in buying and selling cost of the property. Imagine you bought a house for $20000 and after years got to sell it for $40000. This difference of $20000 is the appreciation.
- Equity. When you buy a property and get the tenant to pay for your mortgage, you are building equity for yourself. Imagine you buy a property for 400000 dollars with down payment for 80000 dollars and rent t for mortgage for 25 years. After 25 years you will have a mortgage free property and equity of 370000 dollars.
Please checkout our video by network in Ontario investing in Canada.