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Why Now Is a Great Time to Purchase a Rental Property in Winnipeg

May 29, 2020 | Posted by: Adrian Schulz - Winnipeg Mortgage Broker: Rental Property Financing and Commercial Mortgage Solutions

The COVID-19 pandemic has affected every industry across the world, and real estate is no exception. Believe it or not, now may be the best possible time to take the plunge and purchase a rental property in Winnipeg. Whether you’re just starting out in real estate investment or you’re fully experienced, this is the right time to capitalize on the stable prices and better mortgage rates. With the current pandemic, there is less competition when making offers on real estate, and prices are not inflated due to the fear and emotion caused by the coronavirus—it’s the perfect situation for a real estate investor.

Although improving, global stocks saw a 30 percent crash in March 2020—in contrast, Winnipeg real estate values have remained steady throughout the pandemic. When a property can retain its value even in the face of a global pandemic, that’s a good sign that it’s a smart investment.

Financing your rental property

If you don’t have money in the bank for a purchase just yet, that doesn’t rule out being a rental property owner. In fact, you can use the equity in your home to purchase a rental property—homeowners can use up to 80 percent of their home’s value (also known as equity) for the down payment on a rental property.

If that weren’t enough, interest rates continue to be at historic lows. When leveraging the equity in a home, many lenders offer a 30-year amortization on refinances which, when correctly utilized, can create vast real estate wealth—all using collateral you already own. Although most rental property purchases require a 20 percent down payment, if you have an immediate family member occupying the property along with a tenant, there is a 5 percent down payment option. For example, Genworth’s Family Plan with a 5 percent down payment (for the first $500,000) even allows you to purchase a rental duplex as long as an immediate family member occupies one of the units. This is ideal for families who want to get started investing in real estate, but who don’t want to have to put down a princely sum right away.

How to get started

If you’ve been dreaming about starting a real estate empire—or just learning the ropes with a rental property—this is the best time in decades for investing. By using the services of an experienced Realtor® and mortgage broker, you can grow your wealth in a smart and tangible way. Consult with your mortgage broker about your options and business plan, and learn more about what it takes to be a successful rental property owner.

Being a landlord isn’t for everyone, but many people find it rewarding and lucrative, especially when working with a property manager—they reduce potential owner stress by professionally managing the property, which can cost as little as $100 per month.

These interest rates and low competition won’t last forever—as we get closer to a vaccine for COVID-19, public confidence will rise and more people will be ready to purchase Winnipeg properties again. If you’re interested in investing in Winnipeg real estate, call your Realtor® and mortgage broker right away.

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