Pros and cons of being an absent landlord

Date Posted: February 15, 2012

Before diving into a new mortgage for a rental property, there are several things to consider. Purchasing an investment property while you rent is a terrific way to get started in the mortgage market, however, one needs to be well informed of the differences between purchasing one's own home and a property that is being rented. This article gives a summary of important points to keep in mind when making this decision.

The first thing to consider is to establish contact with Revenue Canada regarding any taxes you would be liable for. They can also inform you of which expenses can be offset against the rental income. It is also important to know that while some lenders will advance 80% to purchase an investment property, it is often less expensive to put 20% down.

Finally, keep in mind who will be inhabiting this residence. It is recommended to view renting a property as a business transaction. However, it may be difficult for some to detatch emotionally when a large portion of their savings is involved.