There’s been a lot of chatter about investment properties these days. Some of it positive—like how it’s a great source of passive income—and some of it not so much. There’s also plenty of legislation and red tape that has been announced by the government.
If you’re considering getting into the investment property game, then there are a few things you should be aware of before you dive into the Kelowna real estate market.
Let’s start by prefacing this: there is nothing wrong with owning an investment property. There’s a difference between having a house on the lake that you rent out for a portion of the year and someone who buys an entire building’s worth of condos only to leave them empty and wait for the price to go up.
We presume you’re part of the former, so you may have some questions that need answering. Lucky for you, we’ve got answers to help you navigate the Kelowna real estate market, along with property investment tips.
What is an investment property?
An investment property is real estate you would own other than your primary residence. For smaller investors, this can be an apartment or condo that can be rented out to cover any expenses associated with the property and potentially provide you with an additional source of income.
In places like Kelowna, plenty of visitors are looking to stay in proper homes rather than hotels; having multiple rooms and access to a full kitchen appeal to many who want to bring the whole family and not have to eat out for every meal. This makes short-term rentals—for a week at a time—much more appealing, but this will be changing soon due to new government legislation.
What’s changed in the investment property market?
The BC government recently created new legislation in response to the housing crisis. The BC Short-Term Rental Accommodations Act gives local government stronger tools to enforce short-term rental bylaws, returns short-term rentals to the long-term rental market, and establishes a new Provincial role in the regulation of short-term rentals.
What that boils down to is there are a lot more rules you’ll have to follow if you don’t want to be hit with hefty fines. For many investors, this means renting their property long-term might be their only option, and that is important to know before diving into this venture.
What do I need to do?
The first thing to consider is your finances. Buying an investment property means putting more money down than a home you plan to live in. Expect to need 20% for the down payment, closing costs, fees, taxes, and repairs. While it does seem like a lot upfront, you will be able to have lower mortgage repayments.
You’ll also want to familiarize yourself with the BC Residential Tenancy Act, which lays out the rights you have as a landlord as well as the rights your tenants have. Following these rules will save you a lot of headaches down the line.
Also, you’ll want to get the place up to snuff if you’re not planning to stay there immediately. The cleaner and more “fixed-up” the place means, the more appealing your property will be on the market and the more potential tenants you will have to choose from.
You can even hire a property management company that will handle the day-to-day dealings of the property, including maintenance. You’ll have to relinquish a portion of the rent to the property manager, but for some folks, it might just be worth it.
If you’re considering getting in on the investment property train, or want to know more about the Kelowna real estate market, then you’ve come to the right place. Not only can help you pick a place that you will love, we can provide you with more property investment tips. Give us a call at 250-860-0303 today, and let’s get started!