In Canada there's an obvious need for better service in this area. As an investor in Canada you are left to figure out investment financing, mortgage insurance, property insurance and property taxes on your own.
It can be daunting, especially for you first time. And just when you don't think it can get any worse try and find a bank or mortgage broker or financial planner that will help you lay down a 5-10 year plan that maps out how you can buy more than 4 or 5 investment properties in Canada.
Unless you are willing to put 20-25% down on each investment property not many people have answers for you. We've mapped out some information on investment property mortgages as a guide for you here:
And you can find some "gotchas" around real estate investment financing here:
Here are our Favorite Real Estate Investment Financing Tips
For example, if you're looking to get a 5% down investment property mortgage there are mortgage insurance fees that need to be accounted for in how you structure your investment.
Some of these fees are high and you don't want to be surprised by them on the day of closing.
You can also usually see prior year's rates and get an idea of how fast they are trending up.
Both are extremely valuable to you. Once you find a good one treat them with care. We've been saved many times by the sharp eye and experience of these contacts.
Make sure you are getting the latest information. Real Estate investment financing products change almost monthly at every Canadian bank. Be on the look out.
If you don't have insurance on the property before closing the investment financing will fall apart. You don't want to be left scrambling for insurance the day before closing.
After a mortgage broker or real estate professional knows that you're an investor you may find them emailing you little flyers outlining the details of what they believe is a good real estate investment.
And because it's coming from a professional you may be tempted to believe their opinion. When these deals cross our desks we're often shocked. The prices are too high, the rents are unrealistic and the exit plan doesn't exist. Take advice from actual investors only.
It'll usually be about 3 months interest and you'll want to factor that into your numbers. Some real estate investment financing will waive most of the penalty if you move the mortgage from one property to another within a certain time frame.
And there you have it. Some of our real estate investment financing favorites.
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