When choosing an investment vehicle, you can always trust rental real estate to be a solid hedge against economic uncertainties. Historically, real estate has been recognised as a secure investment type, primarily because homes, apartments, and other living spaces tend to appreciate over time. When you opt to acquire a rental property for your portfolio, you’re not only earning from the rent your tenants pay, but you also benefit from the appreciation of the property.
All it takes is knowing where to buy rental property that guarantees a high rate of return. Not all local real estate markets are equal, and Toronto has to be the perfect place to hunt for rental assets that will give you a high rate of return. The market has been consistently strong, supported by solid demand from individuals drawn to the city’s high ranking in terms of liveability. However, you will need to tread cautiously when searching for the perfect property to acquire. As a new player in Toronto’s real estate arena, consider these tips that will bring you closer to your goals:
1. Scan the area
A wise investor does thorough research and bases their decisions and strategies on concrete data. Anyone can be impressed by Toronto’s consistency in terms of offering the best lifestyle attractions, but recent economic trends are putting pressure on apartment hunters on a tight budget. You might have to consider how these trends are making an impact on consumer choices as well as your options.
It won’t do you any good if you dive right into the action without relying on the data that matters the most. With this in mind, take as much time as you need to map out the local economy and real estate market. Along with pulling recent numbers on average household earnings and the general cost of living in the city, pay attention to current renting trends and learn which demographic group comprises a large chunk of apartment-hunters.
2. Choose the best neighbourhoods
Your choice of the perfect rental investment property isn’t dependent on socio-economic figures. Keep in mind that renting trends vary from one neighbourhood to another, so you will need to choose communities where you are more likely to find apartments and townhouses that fit your investment goals.
If you’re on the prowl for luxury condos, start your search in high-end neighbourhoods like Yorkville and Lawrence Park. In case you’re an investor focusing on family-friendly and affordable living spaces, go for neighbourhoods like Riverdale and Lansing. Be sure to also look at the potential of these neighbourhoods by looking at access to public transportation, lifestyle amenities, and the availability of green spaces
3. Bank on your local network
Whether you’re Canadian or not, you can’t make good decisions if you lack input coming from local professionals. As you continue to do research on property investing in Toronto, consider reaching out to local real estate agents and brokers who can tap into their networks of sellers and may even suggest off-market options you can check out.
What’s more, you will need good connections in the financial sector. From banks to private lenders, they will provide you with advice on financing your property acquisitions. It also helps if you have people who can help you manage your properties. Ask for recommendations from other investors in the same area.
4. Consider your legal needs
No matter how seasoned a rental property investor you are, it still matters to get legal experts who can help you navigate the unique features of Canadian real estate law. You will need a lawyer to review contracts and draft lease agreements for tenants.
The need for legal services will become even more critical when you deal with tenant disputes. For such cases, it helps if you could lean on the experience of law firms like Powell Litigation to help you overcome these legal challenges. That way, your property remains profitable and legitimate.
As you come around to purchasing a Toronto rental property, you will need to be adequately prepared for anything that might come your way.
