Investing in income property can be an excellent investment vehicle. It can give you a positive cash flow from rental income each month, an appreciation of the property and a reduction in the principal of its mortgage over time.

Whether you’re looking to fix and flip, fix and rent, or supplement your income in retirement, you’ll need a suitable mortgage to help you efficiently acquire and hold your investment property.

An investment property can be bought with some leverage, and a mortgage provides that leverage. It lets you put down at least a 20% down payment of the total purchase price while the bank finances the rest.

When you’re ready to improve your real estate portfolio and grow your income, a mortgage broker can help you through the process and make sense of it. You may have questions for your broker that will help you decide whether to buy an investment property. These may include:

• How much can I borrow for a mortgage and the eventual property? There are several ways we can answer this question. The answer will ultimately depend on what you're looking to achieve with your investment.

• Fixed vs. variable — how to best structure your new investment property financing.

• In what ways will my expected rental income impact things, whether it’s how much I qualify for as a mortgage or the property's estimated month-to-month cash flow?

• How much money do I need to purchase the property, considering my down payment, closing costs, possible renovations or improvements budget?

• What do I have to budget for when weighing my options and running my budget scenarios?

• Does a pre-approval make sense? Is it better to buy the property personally or through a holding company, as well as other considerations for setting it up?

Taking it all in and answering these questions are both necessary. Many of your decisions will be similar to those you made when you bought your own home. Despite this, how you look at options and make decisions will vary depending on what you're looking to accomplish.

Let’s talk. For an easy, stress-free mortgage experience, contact me today. There's no cost to you and no obligation.

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To start, you need to understand the basic math of investing. You either buy low and sell high, or you buy well and keep for a while. Ask yourself, which one do you want to do, and how will your numbers look? Together, we can work out some scenarios and prepare you for your search.

Every investment comes with its own set of risks. We can consider mitigation strategies to help you manage some risks, but not all are inherent in a given investment. Real estate is no different. The plan you choose will have its own set of risks. How you manage or minimize them will depend on your unique approach.

Buying a property out-of-the-box means you’re not inheriting old problems, and the place will come with a warranty. As they say, the new car smell is never free.

An upfront conversation about your numbers can put some of these elements into perspective and help you plan your real estate portfolio around your goals, abilities, and lifestyle.

Cash flow is what you make every month minus what you spend. What you spend every month should include a buffer for any unplanned expenses (which you should be saving up for anyways). Positive means you’re in the plus and visa-versa.

The bank views cash flow-positive property as a more robust investment and is more likely to lend preferentially against it.

How do you estimate and budget for cash flow? That’s a more extensive conversation that we can have.

The answer is it depends. First, you should ask at least three people: your accountant, mortgage broker, and lawyer. There are considerable implications of doing so, but I’ll stay in my lane and speak only to the borrowing ones.

When you finance a property held in a holding company, there are rules you have to follow. In addition, you will:

  1. Limit your choice of lender and product options.
  2. Incur costs and be bound by some additional conditions of financing.
  3. Forfeit some privileges you may be otherwise entitled to when buying a property as an individual. And notwithstanding all of the above, it still makes sense to go the hold-co route for some specific scenarios.

Call professionals, take good notes, and run some solid numbers to make sure this makes sense for you - before you make a move. Ask to be referred to tried and true professionals who can help you improve the quality of the answers you get.

Investment concepts, where the outcome hinges on elbow grease or downright speculation, are often harder to sell to a lender. These projects will hold the operator (you) to a higher standard of financial ability to service this debt should your project hit choppy waters.

In contrast, opportunities, where properties have a strong cash flow and a solid long-term value projection, will be a lot easier. Financing costs will be lower, and the emphasis will be placed on the property itself rather than its investors.

A home equity line of credit (HELOC) is secured credit. Your home acts as a guarantee that you will repay the money you borrowed.

Up to a maximum credit limit, you can borrow money, repay it at your discretion, and borrow again. It typically comes with higher rates than their regular mortgage counterparts. You can best use them for consolidating short-term and/or recurring costs.

There are other factors to consider, and every situation is different. Talk to a professional to help weigh your options.