Mississauga has long been a popular GTA destination for families and major corporations and, because of this, real estate investors as well. But making a sound real estate investment that will return more than your financial and sweat-equity investment takes a lot more than simply buying a property in a popular market.
As you will learn from the tips below, you will have to research and rely on trustworthy real estate investment professionals to help you pick the right Mississauga Income Investment Property.
Build a Team of Trustworthy Real Estate Experts!
As successful entrepreneurs and CEOs will tell you, one of the secrets to their success is knowing when they need help and surrounding themselves with the right people. The same is true in real estate investing.
Invest the time in meeting with several candidates before you partner with a mortgage broker, contract a trades-person or hire a real estate lawyer in Mississauga.
This is especially crucial when retaining a real estate agent/investment advisor, as the success of your investment relies heavily on the information and guidance they provide.
What to Look for in a Mississauga Property Listing?
When comparing property listings, some of the more important characteristics that can impact how much you can charge for rent and/or sell the property for include:
- Lot size and room dimensions.
- The number of bedrooms and bathrooms.
- Conditions of the roof, driveway, foundation, exterior walls, windows, etc.
- Type and condition of the landscaping, decks/patios, etc.
- Details on the furnace, hot water heater, electrical panel, wiring, plumbing, and security systems.
- Features such as flooring, lighting, condition of bathrooms, kitchen and appliances.
Doing the Math!
You may also need your real estate agent or advisor to provide you with information such as the current and historical selling prices, a predicted selling price of the property and rental rates of comparable properties.
Next, you’ll need to calculate your closing/startup costs, including renovations, taxes, legal fees, permits, etc. Using these numbers, you can begin to do basic investment calculations to help you narrow down your search when comparing properties. Some of these calculations include:
- Monthly and annual rental income minus bad debt and vacancy allowances.
- Operating expenses such as property taxes, insurance, municipal services, repairs and maintenance.
- Net operating income calculated by subtracting the operating expenses from the rental income and showing it as a percentage and as monthly and annual dollar amounts.
For more seasoned real estate investors, you may also want to take a look at:
- Capitalization (Cap) rate for a quick look at the potential rate of return by using the net income as a percentage of the initial investment. Cap rates do not include mortgage expenses and future cash flows, among other considerations.
- Annual total return, which shows your return on investment as a percentage that includes rental income growth, expenditure growth, home price appreciation and other factors.
But aside from looking at the numbers, other factors impact the potential income from an investment property in Mississauga.
Location and Amenities!
Other property characteristics to consider include:
- A home’s proximity to schools, community centres, hospitals, shopping malls, etc.
- Access to public transportation and major highways.
- The local job markets.
Finally, to help you gauge a property’s potential for attracting the right tenants, look at the number of properties available for rent in the area. Then research its current and historical rental rates. A high volume of unoccupied properties combined with decreasing rental rates can indicate a neighbourhood in decline, while the opposite could signal an up-and-coming neighbourhood.