When it comes to purchasing an income property, there are several steps to consider. Here is a summary of notable steps that you should consider when starting your journey to find an income property in Saskatoon:
- Mortgage pre-approval
A mortgage pre-approval for an income property is the process of determining how much financing you can secure from a lender to purchase a property that will be used for rental purposes. It’s similar to pre-approval for a primary residence but may involve additional considerations due to the investment nature of the property. For example, the downpayment requirement may be higher and some lenders will factor in a portion of the rental income to offset the mortgage payment. Let me know if you would like to be connected with a trusted mortgage professional in Saskatoon for this type of investment. - Choosing a neighbourhood
Choosing the right neighbourhood for your income property is crucial for maximizing rental income, ensuring steady tenant demand, and securing long-term investment returns.
An ideal neighbourhood for an income property will have plenty of amenities, desirable livability scores, and a great neighbourhood reputation. This is important to attract ideal renters. Research upcoming projects that could increase demand, such as new infrastructure, transit lines, or businesses. A growing neighbourhood often signals a good investment opportunity. - Review the average property tax and condo fees if applicable
Property taxes will vary between neighbourhoods and size of home. Condo fees will also vary between buildings. Having a feel for property tax and condo fees if applicable will help you gauge the rent required to offset these costs. If you have a specific income property in mind, it is best to use the actual expenses for that property to build out your budget. - Review the vacancy rates
Reviewing the latest statistic on vacancy rates in the city and specific neighbourhoods will help you determine the risk level of vacancies. Vacant month(s) can be detrimental to your overall income, especially in the first year. It is recommended to build a vacancy allowance into your budget. - Find out the average rent value in the neighbourhood
The goal with an income property is, just that – to make income! Before you put an offer on a home it’s important to look at what the homes in the area are renting for to ensure you’re making the profit you desire. - Pay attention to the condition of the home
Even though you won’t be living in the home you will be maintaining it. It can be tempting to buy the cheapest home you find but if it’s going to cost you an arm and leg just to maintain it may not be worth it. A professional home inspector is an important advisor that will take a look at the home and identify red flags. - Saskatchewan Landlord Association
This is a key resource for landlords in Saskatoon and across the province. It provides education, advocacy, and resources to help landlords navigate the complexities of rental housing management. The SLA works to promote innovative practices and advocates for equitable legislation that benefits renters, landlords, and property managers alike. The association offers support for managing rental properties, keeping members informed about legal obligations, and providing updates on market trends. It’s a valuable network for landlords looking to improve their operations or address challenges in the rental housing industry. - Work with a REALTOR®
I have a long history in owning several income properties and enjoy working with investors to find the one that is right for them. There is a lot of opportunity in Saskatoon to build an income generating portfolio of real estate investments.
Send me a message anytime if you’ve been thinking about purchasing an income property. I can set you up with a timely email of new listings that meet your criteria in the Saskatoon real estate market. If there is a property that you already saw online, then let’s go take a look at it!
