5 Easy Steps - How to go from being a Tenant to a Landlord
Are you Sick and Tired of Renting and paying someone else’s Mortgage?
Are you sick of putting up with other noisy tenants in your building?
Do you want to purchase your own home but don’t know how?
Do you want to have some one else help pay your mortgage?
Do you want financial freedom for you and your family?
Can you answer yes to any of the above ??
Let us help follow the 5 easy steps listed below and we can change your financial life for ever... It is easier than you think !
STEP 1 Financial check up and pre-approved for the mortgage
- Talk to one of our specially trained investment mortgage brokers and we will discuss your current financial situation.
- Based on your monthly income, current credit rating, existing debt, down payment available, we will calculate a maximum purchase price.
- Remember your down payment can come from your RRSP, a gift from a family member.
- Zero down payment mortgages still exist, with a good credit rating you may qualify for what is called a Cash Back Mortgage (higher interest rate, but the bank provides the down payment up front)
- If you don't qualify today we will put you on a financial plan to qualify in the future
- There are hundreds of different financing options, thats why we speak to the expert
- Now we know how much you qualify for we can determine a maximum purchase price
STEP 2 Calculate the Potential Target Cash Flow
Now we will sit down with you and calculate your target Cash flow. Your typical cash flow may look like
- Purchase price = $ 300,000
- Down payment 5% = - $ 15,000
- CMHC Fee = $ 8,978
- Mortgage amount = $ 293,978
- Monthly Mortgage payment = $ 1,256 month
- Tenants pay = $ 850 month
- Your monthly mortgage payment = $ 406 month
To Qualify for this mortgage you would need a gross combined income of $4,500 a month at a 4 % interest Rate Calculate your numbers
STEP 3 Find a great property with a Basement Suite
We will help you locate a property that fits your target cash flow. This may be a home with a basement suite or maybe just an extra room to rent. This will allow you to generate income from your property to help pay down your mortgage faster. We will take into account
- Neighborhood: Location - Location - Location NW/ SW/ SE/ NE
- Property type Duplex, House, Townhouse, the pros and cons of all different types
- Land Value, which areas appreciate faster
- Fixer upper properties, foreclosures
- Best Rental Neighborhoods, were can we maximize your rents
- Proximity to transportation, shopping, work
- Home structure, doors, windows, security, furnaces, electrical services, parking, garages, maintenance, issues
- Legal vs illegal basement suites, what are the rules
- View some suited properties at the bottom of this page
STEP 4 Purchase and Close on the property
Now that we have found the property we will guide you safely through the purchase and inspection process
- Write the offer and Nnegotiating a great price
- Special conditions
- Possession dates
- Home inspection
- Type of mortgage
- Vacant Tenants or possession with tenants
- Transferring damage deposits
Step 5 Select a great Tenant
We will teach you what to look for in a good tenant, help you with the leases and the interview process. Some of the important issues to consider are:
- Were to advertise, on line vs. newspaper
- How much to charge for rent
- How much to charge for damage and utility deposits
- What makes a good/ bad tenant
- How to pre-screen the calls
- Pets, Sstudents, Children, Smokers
- Include the Utilities or not
- What goes in the Lease, how long a term, when to have the term expire, do I even need a lease
- Do I need a trust account for deposits
Bonus Step 6 Congratulations you now have Passive Cash Flow !
Now you have your first property and you are a successful landlord. Your money is now working for you, and you are generating a passive income while you sleep. We now plan how to purchase property number 2
- Refinancing enough for a second down payment
- Make sure the first mortgage was structured correctly to easily finance out the down payment
- Rent the second unit in Property 1
- Purchase a new property for you to live in and rent ½ of it
- You are now on your way to financial freedom (see you on the beach)
THE MOST IMPORTANT STEP Take action,, it may see like an impossible dream in todays market but with a little guidance from our expert team of Mortgage Brokers, Realtors, Property Managers, Lawyers, REIN Education Team, you can become financially free CONTACT GLEN and get started today !!