How do you get started buying in Canada?
For anyone wanting to move to the capital, the short answer is to make sure you have a solid plan in place.
“There’s a lot of variables, and I think there’s a couple of things that you need to look at,” says Michael Coteau, a Vancouver real estate agent who’s also a member of the Real Estate Council of Canada.
“One is the tax rate.
I think most people are under-informed about the real estate tax.
The other thing is how much you need in your investment property to make a difference in the property.
There’s no one-size-fits-all answer, so I think it’s really important to know exactly what you’re looking at.”
Cotear says the ideal investment property is a small, single-family home with the ability to withstand a severe weather event.
“You can’t just buy a bigger house and hope it’ll withstand the weather,” he says.
Coteau recommends checking with the local real estate agents before you buy, as it’s important to keep your costs down.
“They can offer some advice on what kind of property you want to buy and what kind you can afford to pay for it,” he explains.
“If you can, I recommend having a very close look at what they offer.”
The key to successful investment property buying in Vancouver is getting an investment property with a strong credit rating.
That’s the lowest possible score possible, meaning it can’t be underwater or under-funded.
For example, the City of Vancouver has a rating of A+ for its housing stock, meaning the property is “reasonably safe and sound,” meaning the bank has an acceptable credit rating, according to the city’s website.
Cotea says this is the perfect benchmark for choosing a property to buy.
“The more solid credit rating that you have, the higher you can go in the marketplace,” he points out.
“That’s the key, and if you have good credit ratings, the lower the risk you’re going to have of a home crashing and sinking.”
The same is true for Toronto.
“A B rating is considered the gold standard,” says Coteaus.
“In fact, in Canada, the B rating system is the best.
A B+ is very good, and B is considered good by the lenders.
So if you’ve got a good credit rating and a good bank that’s not under-capitalized, it’s a good bet.”
If you’re planning to buy a property in Toronto, be sure to do some research on the property’s history and ask the realtor if there’s anything they can recommend.
For instance, “The Toronto Real Estate Board has an annual appraisal and appraisals program.
It’s called the Toronto Assessment Program,” says Mike Coteauer.
“There’s an online application that you can download, and you can look through that to find out if there are any recommendations from the Board of Assessment or if they have any recommendations that would make the property even better.”
In a lot less desirable neighbourhoods, a home’s value is directly related to its credit rating – “If a home has a B+, it probably has good credit,” says Joel Coteaur.
“But if a property has a C, it could be a good investment.”
If you’re considering a property, Coteaucau says you should be looking for properties with low down payments, a “stable” mortgage, and low vacancy rates.
If it sounds like you’re not ready to get your finances under control, you may be interested in renting out a home.
Renting is also a viable option if you want more space or if you’re already in a relationship.
But renters who don’t like to live in their own home, are not prepared to pay higher rent rates, or who don´t have a financial incentive to live anywhere else are probably not going to be a very happy tenant.
The best way to assess a property for rent in Vancouver, however, is to get an appraisal from a real estate professional who specializes in properties of that type.
Cotesau recommends looking for a realtor who specializes exclusively in Vancouver properties.
“When I think about an appraisal, I don’t want to be looking at a home that’s only going to last me a few months,” he tells Mashable.
“I want to see a property that is going to stay in good shape for the long-term, that has the ability, that can withstand a storm, and that’s going to make me happy.”
For a home appraisal, it might help to do a bit of research on a particular property before you make your final decision.
“It’s important that you talk to someone who has experience doing these types of analyses, and know what the criteria are, and what the risks are, in a particular neighborhood,” says James Strain, vice president of research and analysis at Coteaux Re