Dear experts,
I have never been a homeowner before and as a first purchase I would like buy a property that would be my residence as well as an investment. I was thinking of buying a triplex or a four-plex in the Toronto area where I live. I would like it to be a long-term investment that will either help me buy bigger/more properties later or at the very least provide me with some retirement income (I am in my early 30’s now but I am sloooowly starting to think about retirement, plus I would like to invest my money in something other than stock market or a 1% GIC). From what I understand, and correct me if I am wrong, it will cost me a lot less to buy a triplex/fourplex than to buy a condo and then buy another condo (or condos) as an investment property.
I am new to the real estate world and sorry if some of my questions sound too dumb, but I wanted to know:
- If making such purchase is doable with a regular residential mortgage.
- What is a typical down payment that needs to be made on triplexes or fourplexes (which would also be the owner’s primary residence)? Is it doable with 5% or 10% down?
- Aside from my down payment, my own credit history and present income, what else would banks look at? Would the lender also consider rental income (potential or proven) when qualifying me for the mortgage?
- Would I be eligible to take out 20K from my RRSPs and use them as part of the down payment? That money has set there for the last 10 years without making me a penny so if I could, I would like to put it to a better use?
I obviously I have a lot of research to do and educate myself on both purchasing process as well as property managing, so I have a long way to go (which will help me save more money along the way), but if there is any other advise that any of you are willing to give to someone who is brand new to all of this, I would greatly appreciate your insight.
All the best,
Nick
I have never been a homeowner before and as a first purchase I would like buy a property that would be my residence as well as an investment. I was thinking of buying a triplex or a four-plex in the Toronto area where I live. I would like it to be a long-term investment that will either help me buy bigger/more properties later or at the very least provide me with some retirement income (I am in my early 30’s now but I am sloooowly starting to think about retirement, plus I would like to invest my money in something other than stock market or a 1% GIC). From what I understand, and correct me if I am wrong, it will cost me a lot less to buy a triplex/fourplex than to buy a condo and then buy another condo (or condos) as an investment property.
I am new to the real estate world and sorry if some of my questions sound too dumb, but I wanted to know:
- If making such purchase is doable with a regular residential mortgage.
- What is a typical down payment that needs to be made on triplexes or fourplexes (which would also be the owner’s primary residence)? Is it doable with 5% or 10% down?
- Aside from my down payment, my own credit history and present income, what else would banks look at? Would the lender also consider rental income (potential or proven) when qualifying me for the mortgage?
- Would I be eligible to take out 20K from my RRSPs and use them as part of the down payment? That money has set there for the last 10 years without making me a penny so if I could, I would like to put it to a better use?
I obviously I have a lot of research to do and educate myself on both purchasing process as well as property managing, so I have a long way to go (which will help me save more money along the way), but if there is any other advise that any of you are willing to give to someone who is brand new to all of this, I would greatly appreciate your insight.
All the best,
Nick
