Purchasing rental property in Waterloo is a good idea?: The Waterloo area is currently one of the best places to buy a rental property in Ontario because of six growing trends:
- Rising rental costs: Rent for a two-bedroom apartment in Kitchener jumped from $1,200 to $1,500.
- The Kitchener-Waterloo-Cambridge urban area has the second-fastest growth rate in Ontario.
- There is a large influx of people from high-value city centers.
- The young professional demographic is growing dramatically in terms of economic growth, career opportunities, and post-secondary institutions.
- Buying rental property in college towns has always been popular, and recently there has also been an increase in international student enrollment at post-secondary institutions in the city, fueling the growth of the area.
Some rental property expenses are tax-deductible for Ontario residents.
Don’t own a rental property yet? Don’t worry, we’ll tell you what you need to know before making this offer.
Buy rental property or invest in yourself?
If you have a rental property such as a condo, apartment, detached house, or townhouse, you already have a great potential to earn additional income.
But what if you own your own home and can’t afford to take out another mortgage? Or don’t have time to maintain any other assets?
You can consider investing in your existing property by adding an in-laws suite, grandmother flat, or small house. As a side advantage, adding income potential to your home can also develop the resale value.
Renting out a part of your property is not for everyone. So if you have decided to invest in the Waterloo area real estate is right for you, follow the steps below.
How to Buy a Rental Property in the Waterloo Area
The good news is that buying a residential rental property is far easier than buying a commercial property. The bad news is that it’s 100% seller’s market right now, so you’ll be up against some competition.
The steps below are specifically focused on buying residential rental property in the Waterloo area:
- Review your finances and set your budget limit.
- Choose what type of property you are interested in buying such as townhouses, detached homes, condos, semi-detached homes, duplexes, triplexes, etc.
- Use our advanced search to see new listings every few days. Keep in mind that properties in the market sell out within an average of 19 days, so once you’re ready to buy, you need to move fast.
- Get help from our handy Home Realty team. We’ll answer your questions, help you avoid market mistakes, and send you the best possible listings.
- Reserve a meeting at your local bank to handle your mortgage pre-approval.
- Complete your mortgage pre-approval application and receive your pre-approval letter.
- Now that you’ve seen several of the lists, start narrowing your search in terms of amenities, neighborhoods, and renovations.
- Book Private View with your top picks. Private Views give you more time and privacy to discuss the property with your realtor and/or business partner.
- When you find an asset you’d like to bid on, we can help you determine a bidding strategy. Residential properties in the Waterloo area can get anywhere from 5 – 20 offers on average, so you will need a strong offer.
- Once your proposal is selected, congratulations! You have become a rental property investor. Your next step is to prepare the unit to be habitable.
- Is your property in Waterloo? Then you have to get a rental license. Is your property around the Kitchener, Cambridge, or Waterloo area?
- There are several steps and fees involved in obtaining a rental license in Waterloo. You have to pay the application fee and renewal fee for the first time. They differ depending on the type of license and assets you own.
- Create a rental agreement for your tenants to sign. You can pay your lawyer to get one made.
- List your rental property online, review applications and conduct interviews, then choose your tenant and have them sign your rental agreement.
- Maintain your property by repairing broken items, paying property taxes and condo fees, and providing amenities such as heat and water. To avoid complaints and fines, your property must meet the standards set by the city.
- Remember to renew your license! You will receive a notification in the mail when it is about to expire.
Rental Property Regulations in the Waterloo Area
Each municipality has its rental property by-laws, so you may find that the rules differ slightly depending on whether your property is in Waterloo versus other cities. These rules generally apply to all properties:
- You must meet the health and safety and human rights needs of your residents.
- Pay property taxes and any other municipal fees.
- Provide your tenants with necessities including heat, water, and hydro.
- You and/or your tenants may not conduct any business from your place of residence.
- If the property you buy is in Waterloo, you will need to pay the landlord’s license fee which averages $287.00.
- If your place of residence is reported against, the authorities have the right to inspect it for complaints such as unsafe or unclean living conditions.
How to Register a Rental Property in Waterloo
There are different types of rental property permits in Waterloo:
Class A: Rental units not covered by any other class
Class B: Owner-occupied residential rental property
Class C: Rental units with 5 or more rooms
Class D: Recognized Lodging House
Class E: Temporary Rental Unit
Class Z: Buildings with four or more horizontally separated housing units
Best places to buy a rental property in the Waterloo area
There are some neighborhoods in the Waterloo area that have better investment opportunities than others due to lower property taxes and proximity to secondary schools. Like: Doon & Doon South, Willowdale, Mount Hope Huron Park, etc.
Some investors choose to avoid Waterloo altogether because they do not agree with the rental license fee.
It has been a controversial topic among municipalities since it came into force in 2011. However, Waterloo is home to Wilfrid Laurier University and the University of Waterloo, so don’t write this off too quickly.
Know every information about Regional Government in Waterloo and still thinking that Purchasing rental property in Waterloo is a good idea or not then visit https://www.regionofwaterloo.ca/