Investment Properties
Considering buying a multiplex property to enter the rental market? While it's a great way to diversify your income and build wealth, it's essential to be well-prepared. Investing in income-producing real estate is akin to starting a business.
Before you begin, quantify and analyze the financial implications to ensure profitability and calculate your ROI. Assess your ability to manage risk, as rental real estate doesn't guarantee constant profits. Understand the legalities of managing tenants and maintaining a safe building.
For your mortgage, the down payment depends on the number of units and whether you will live in the building. Typically, a 20% down payment is required. However, for a duplex where you live in one unit, only 5% is needed, and for properties with 3-4 units, the requirement is 10%.
Investing in real estate is an excellent way to build wealth and achieve financial stability.
Helpful Information
How to Calculate Your Return on Investment (ROI):
- Calculate your expected income
- Subtract the operating expenses from that income
- Then divide that number by the down payment on the building
The final number represents the annual return - this should be higher than the mortgage rate.
Check out our Easy Online Application to see what kind of Mortgage you may qualify for!