If you know me or have worked with me, you know that I’m big on investment real estate in Victoria. In fact, I’ve been investing in properties since I was 20 years old. Today, as a real estate advisor, I love helping clients get the most out of the sale of their home or the best value on a new purchase.
Some of my biggest advice for anyone looking to enter the real estate market in the Greater Victoria area is to stop chasing your ‘forever home.’ That strategy may have worked in the past, but today, smart buyers see their home as good investments first.
The reality is that we’re in a competitive real estate market, which means you need to be smart about your real estate decisions. Get your foot in the door now with good investment real estate, and you’re setting yourself up well for the future.
Exactly how to do that? Let’s cover some of the basic questions I get the most often about investment real estate, focusing on those looking for rental income properties.
1. How much deposit do I need for an investment property in Victoria?
Depending on your lender, you will need to deposit at least 20%. Note that they may be increasing this in the near future, making it all the better to lock in that 20% while you can!
2. How much will my property taxes be?
This will vary depending on your city and the size of your property.
If we’re talking about a small condo in Victoria, you can typically expect something in the $1500-2000 range. Obviously, if you’re looking at a house, then this number will be higher.
3. Can I live in my investment property in Victoria?
Yes! You can live in your investment property. This can be a great way to reduce your mortgage payment, especially when you’re first getting into the market. That said, it can also have tax implications if you are switching the use of your property (from personal to investment or vice versa) or mixing it between personal/investment use, so always speak to your real estate advisor before making this decision.
4. What’s involved in being a landlord?
Being a landlord is a big commitment. It’s one that I enjoy, but it’s not for everyone.
Ultimately, you can find all the rules and regulations around residential tenancies here.
Better yet—let’s have a chat. Together, we can figure out what’s best for you and your goals.
5. Should I look at units that already have tenants?
Not necessarily. Having existing tenants can have downsides, because you’ll be locked in with them at the rate they currently pay.
That said, if it’s a great tenant paying market rent, then you might consider that a bonus!
Ultimately, it’s not always beneficial to purchase a tenanted property, unless it’s a fantastic deal, of course. This is something you really need to consider on a case-by-case basis.
And remember that there are very strict rules within the BC Tenancy Act when you are purchasing a tenanted property—again making a trusted real estate advisor critical in this process.
6. Should I work with a property management company?
It depends! Personally, I love managing my properties myself, but I understand that it’s not for everyone. Especially if you are just looking for passive income, then of course you may want to consider hiring out this responsibility. Just remember that there’s a cost associated that can have a huge impact on your bottom line.
#1 Tip: What You Need To Know Before Buying Investment Real Estate in Greater Victoria
One misconception I hear a lot is that you need to make a profit when buying an investment property. That is definitely not the case, at least at the beginning.
Basically, if you can breakeven, you are winning! This means your mortgage is being fully paid off, and you are increasing equity each month.
Then, if you eventually increase your rent and start to profit, that’s an extra cash flow bonus! My recommendation is always then to put that profit back onto the mortgage, which will help with your next investment purchase.
Of course, I realize this is all easier said than done, which is why it can be so helpful to work with a real estate advisor who’s not only got your back, but also understands the ins-and-outs of investment real estate in Victoria, B.C. Please reach out if you’d like to learn more or get started!