Have you been considering investing in real estate to build your wealth? The first question you should ask yourself is, can you sustain the payments on an extra property in the event that it is vacant? With your mortgage agent, you’ll want to ensure that you consider all of the costs associated with owning the space; mortgage payments, utility bills, insurance payments, etc.

What to Know When Becoming a Landlord

Whether you’re looking to rent long-term with a tenant, or short term on a platform like Airbnb, there are factors to contemplate to decide whether renting your property to others could be for you.

Here are a few factors to consider before investing in a certain piece of property.

  • Is the zoning in place to allow long-term or short-term rentals?
  • Can you get insurance on the property?
  • Will your lender allow renting through your mortgage agreement?
  • Can you sustain the payments of the property if the space is vacant?

 Each investing journey is unique, so we recommend talking to a group of professionals including your realtor, accountant, lawyer, insurance agent, and of course, your local mortgage broker.

With A+ tenants and a properly maintained property, you can reap the rewards as a landlord for many years to come. Your top focus when searching for the perfect rental property is your investment budget and the cashflow that the property could create. Make sure you sit down and get real with the financial figures of investing in specific real estate; from property tax costs and recent utility bills to other ownership obligations – it’s imperative you determine if the property will cashflow or become an investment burden before you purchase it.

Utilize the Equity in Your Home to Buy Real Estate

Completing a refinance on an existing home that you own with a certified mortgage advisor can grant you access to funds that you may need for a down payment to purchase an investment property. A refinance will allow you to access up to 80% of the appraised value of your home (with most lenders) as a total mortgage balance. You can use the funds for the down payment and closing costs on the new property, and then move onto finding an incredible tenant who will help to build your wealth.

Learn more about how working with a top mortgage broker to use the equity in your home to build wealth HERE (link to refinance page)

Additional Considerations

  • Canada Revenue Agency will want any income you earn from renting out your vacation property claimed on your taxes. This will be added to your other sources of income and taxed at your designated bracket for the year.
  • When the time comes to sell an investment property (or secondary home) it’s important to note that you’ll likely be subject to capital gains tax on 50 per cent of the equity you’ve earned over the course of ownership. This 50 per cent equity gain is added to your annual income and your federal tax bracket rate is applied to that total – this means that the higher your income, the higher the capital gains tax will be. 
  • If this property is to be passed down to your family estate, those successors will assume any capital gains tax after the sale. Chat with your professional financial advisor to set up a plan of succession that best suits your family’s needs.


We’ve got the best licensed mortgage brokers in the GTA here on our team – connect to learn more about real estate investing, resources for landlords, tips for saving and more.


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