Guide to Purchasing Your Investment Property in Victoria
Are you ready to invest in a rental property? Victoria is one of British Columbia’s most popular places to live, combining mild weather with stunning nature and plenty of fun-filled activities.
Whether you want to rent a property or plan to invest in a commercial business, the process can be daunting.
Luckily, we’re here to clear everything up for you with our complete guide to purchasing an investment property. Let’s jump straight in.
Why Invest in a Victoria Property?
Victoria BC, might be unable to match Vancouver and Toronto in size, but it certainly has plenty of character.
Factor in the thriving economy, it’s easy to see why Victoria is a prime location for real estate investment. Here’s why so many people choose to invest in the city:
- Strong Rental Market: Victoria has a growing population with plenty of students. The city’s low availability of rental properties also means investors can generate high levels of interest (CTV News).
- Seasonal Rentals: With its beautiful gardens, historical attractions and outdoor activities, Victoria is the perfect place for seasonal rentals. Investors can offer tourists AirBnB properties and make a profit.
- Economic Stability: Victoria has a stable economy driven by government services, education, technology, and tourism. The stability sustains rental income and property values.
- Appealing Lifestyle: The city’s temperate climate, nature, and laid-back vibes make it attractive to students, professionals and retirees—there will always be a housing demand.
- Growth Potential: With ongoing infrastructure developments and a focus on sustainability, Victoria is expected to continue growing, making property appreciation likely over time.
Financial Benefits of Purchasing an Investment Property
Purchasing an investment property requires a lot of consideration, and the initial expenses can put some people off. However, multiple financial benefits are associated with investment properties, and they usually pay off in the long term.
1: Securing your financial future
Purchasing an investment property can be a great way to generate passive income. We’re all looking for that elusive side hustle, but real estate investments provide a steady income through rental payments or business opportunities.
The extra revenue can be used to build a savings account, make other investments, and enjoy long-term financial security.
Remember, your investment property’s value can increase over time, which means you might make a significant profit in the future.
2: Building equity and credit
Every mortgage payment you make on an investment property builds equity. As that equity increases, you’ll own more of the property, which gradually increases your wealth.
It’s important to remember that paying off the outstanding mortgage is just one benefit, as you can use your equity to make other investments.
Many investment property owners build equity in one property and then use that money to purchase another.
3: Having assets to pass down to children
Owning an investment property allows you to build a valuable asset to pass down to future generations.
We all know that owning a property is harder for younger generations today, but your investment could give your children a financial head start.
First Steps to Securing Your Investment Property Mortgage
If you’ve weighed up the pros and cons of buying an investment property and would like to go ahead, there are some vital steps to follow.
From finding an affordable mortgage rate to investing in a property that will offer long-term financial security, the following steps ensure a stress-free process.
Consult With a Victoria Mortgage Broker
Looking for a mortgage through mainstream channels means you might not secure the best deals.
Mortgage brokers can help you access the right terms for your needs and will support you throughout the application process.
Working with a professional mortgage broker means you can find lenders that suit your financial circumstances.
Choose Your Down Payment Option
Next, it’s time to decide on your down payment. In most cases, you’ll need a larger deposit for an investment property than residential homes, with the standard amount between 20-30%.
Again, this depends on your unique circumstances, and the government’s commitment to creating more housing options might mean you can access mortgages with lower down payments.
Work With A Realtor
Working with a realtor specializing in investment properties is always a good idea. These professionals will understand what you’re looking for and can discuss each property’s rental income.
Most importantly, they’ll help you find properties that align with your investment goals without trying to oversell.
Have the Property Assessed
Before finalizing any deal, get a thorough property appraisal to ensure the price is appropriate and you make a wise investment. The last thing you want is to jump into a decision and then face extensive costs.
Spending more on a property that doesn’t require much maintenance means you can maximize your investment.
Realize All Potential Closing Costs
You’ll also need to factor in additional costs when you purchase an investment property. It’s easy to forget about closing costs, taxes, insurance, and legal fees, but focusing solely on the down payment could lead to excess debt.
These additional fees can mount up over time, underscoring the need for a comprehensive financial plan. When purchasing an investment property, make sure you have enough money to cover all your legal fees and other expenses.
Secure Trustworthy Tenants
Last but not least, remember to find trustworthy tenants. You’ve spent all that time looking for a property, securing a mortgage and planning your financial future, so make sure your tenants are reliable and will treat the property with respect.
Working with a reputable letting agency can give you peace of mind, as agencies perform extensive checks on prospective tenants.
Book A Meeting With a Victoria, BC Mortgage Broker
Victoria offers a range of investment properties, including condos, apartments, houses, and commercial buildings. If you’re ready to find a mortgage, working with an experienced broker can help you find the best deals.
Prime Mortgage Works can help you assess your affordability and choose a mortgage that aligns with your financial goals. Please get in touch if you have any questions or begin your application today.
