Looking to get into the Rental game?

downloadSo I, like many are stuck wanting to own a home but do not want to live outside of the downtown core or can afford to own in Vancouver. Therefore my options are few. Therefore I have decided to Buy to Rent. Here are some tips I found helpful when getting ready to get into the Rental game:

1. Expect to put down a larger down payment

  • Most lenders will expect you put at least 20% down of the purchase price of the home
2. Pick the right Lender
  • Each lender will allow you to declare a certain amount of rental income when qualifying for a mortgage.  Also that each lender will loan a specific amount compared to your Total Debt Ratio and Gross Debt Ratio. Each Ratio is a calculation of your monthly spending. Most lenders will only lend up to 40% of your TDS, but some offer 42%. That 2% could be the difference you need to get a mortgage. Speak to a Mortgage Broker, like myself, to find out which one works best for YOU.

3. How many properties do you want to take care of?

  • The morre properties you own the more risk the Lender must take on when committing to a Mortgage. Work with the stricter Lenders for your first few properties then switch to more lenient lender as you buy more. A Broker can advise you of which lenders to use.
4. Get your Papers ready
  • Lenders will want to see a signed lease, and proof or rental income and 2 years of tax returns to prove a net gain or loss
5. Dont focus on Rate
Forget about getting the lowest rate. Look for a Lender that is willing to:
  • have flexible rental income rules
  • allows you to carry a greater debt ratio
  • lets you put a property in a company name for liability protection
  • lets you finance more than four or five properties
  • doesn’t impose a minimum net worth requirement
  • allows 30 amortizations to maximize your cash flow
  • lets you prove rental income with “market rent” appraisals
  • allows a gifted or borrowed down payment
  • allows second mortgage
  • Lends on large mortgages
  • has a low minimum credit score
  • allows rental income from suites that don’t conform with current municipal bylaws
  • provides cash back
  • allows you to add a vendor take-back mortgage
  • offers a line of credit with your rental mortgage
  • pays for your switching fees

6. Pick the right Mortgage Broker

Thanks and Good Luck!

exerts from – http://www.theglobeandmail.com/globe-investor/personal-finance/mortgages/buying-a-rental-property-how-the-financing-game-has-changed/article6137071/