Investing in property offers Canadians a solid option for regular income and a secure financial future through long-term property price appreciation.

Investing in rental properties in Mississauga and the GTA can be attractive for several reasons:

  1. Mississauga has a robust real estate market with a history of property value appreciation.
  2. Mississauga has experienced steady population growth, driven by its proximity to Toronto and reputation as a vibrant and diverse city.
  3. As a suburb of Toronto, Mississauga benefits from its economic opportunities and amenities. Many people choose to live in Mississauga while working in Toronto, making it a desirable location for renters.
  4. Mississauga boasts excellent infrastructure, including transportation networks, schools, parks, and shopping centers. These amenities contribute to the city’s overall appeal to potential tenants.

For first-time buyers, duplexes or triplexes present a strategic entry into the market, with renters helping pay the mortgage. It can be a great way to get into a single detached and bypass starting with a condo or get you into the neighbourhood you love. Parents also find rental properties beneficial for offsetting post-secondary housing costs. It can be a fantastic way to offset the cost of housing while making a solid investment.

Properties are also bought for personal use, vacations, or future retirement residences, and rented out while not in use.

Investment Property Financing Considerations

The first thing to consider is the number of units your rental property will have. With most rental properties that have 1-4 units, the qualification criteria and financing options are like the mortgage on your principal residence.

Investment properties with 1-4 units are eligible for mortgage default insurance through CMHC and other insurers, which means rates will be competitive. Mortgage default insurance is needed for all downpayments of less than 20%.

The next most important consideration is if you, as the owner, will be living in one of the units or not. If you will be occupying one of the units, the property will be viewed as owner-occupied. If all the units are rented out, your property is non-owner occupied. The major difference between the two is how much of a downpayment you need to make.

With a non-owner-occupied investment property, a 20% down payment is needed, but you may have the option to take a 30 or 35-year amortization to reduce payments and help with cash flow. There may also be a premium added to your interest rate for the investment property mortgage and the extended amortization.

Suppose you plan on living in one of the units. In that case, for 1 to 2 units, you can put down as little as 5-10% (5% on the first $500,000 and 10% on the rest). For 3 to 4 units, a minimum 10% downpayment is required. The maximum amortization available is 25 years. Properties valued at $1 million or more are not eligible for mortgage default insurance and therefore a 20% downpayment is required.

Other Financing Options

Using your home equity through a Home Equity Line of Credit (HELOC) is another financing option for your investment property. Or a cash-out refinance will let you access your home equity to help with your purchase, although you need to break your current mortgage and incur the fees to do so, and then requalify for a new mortgage amount higher than what you currently owe.

Joe Purewal, Mississauga Mortgage Broker – Trusted & Expert Advice

In navigating the promising landscape of the Mississauga, Toronto, and GTA real estate markets, Joe Purewal is your seasoned expert ready to guide you toward financial success. With over 20 years of experience and a vast network of over 50 lenders, Joe brings a unique blend of knowledge and personalized service to the table. His commitment to helping clients build long-term wealth through real estate sets him apart. Whether you’re a seasoned investor or exploring your first property venture, Joe’s expertise ensures that your financing aligns with your goals. Seize the opportunity to unlock the potential of an investment property with Joe Purewal by your side. Contact Joe today!

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