Buying a Condo to Rent Out - A Good Idea for a Property Virgin | Personal Finance & Lifestyle | Yakezie Forums

So I live in Vancouver where houses and condos are ridiculously expensive, but my BF has some money tucked away and was thinking about buying a condo in the suburbs (way cheaper) and renting it out. The tenant's rent would cover almost the entire monthly mortgage payment, and we would continue to rent our apartment in Vancouver because we really like the location. Is this a good idea for someone who has never bought property before? He's looking at it as if it's a longterm investment seeing as the tenant would basically be paying his mortgage. Any thoughts from anyone who has invested in property before would be much appreciated!

You need to do the math. If you beat the long term stock market return with rental income, go for it.

Eric – NarrowBridge.net said:

I would not buy just to rent. I would rent out a place if you own and move out, but buying your first real estate just to rent out (cash flow negative) is a big risk with high potential downside. I would hold off until you are ready to buy yourself.

Well that's kind of the issue. We can't afford to buy a place where we live and we don't want to move an hour of the city to own our own condo, but we definitely want to invest in property as the value of housing in the area goes up about 5 – 7% a year. My BF has a friend who does this and owns two places, one of which he lives in and the other he rents out. He usually only has to pay an additional $50 on top of the rent he gets to make his mortgage payments. It sure isn't as profitable I guess as buying a place in the states for super cheap and renting it out and making a profit from it. Thanks for your thoughts!

I've been thinking about buying a place to rent as well. Instead of condos however I've been researching commercial properties because leases are usually longer than 3 years, and I won't have to worry about strata fees, and repairs. If something breaks it's not the landlord's responsibility. The shop owner has to fix it or he loses business :) If your bf has the money I would encourage you guys to consider diversifying your investments. So maybe put 75% of it as a down payment on a condo, and use 25% to buy a private REIT, agricultural land, or maybe something else in the exempt market to spread out the risk. I think it's a good long term investment to buy real estate, and there are many different ways to do it. Good luck.

Liquid said:

I've been thinking about buying a place to rent as well. Instead of condos however I've been researching commercial properties because leases are usually longer than 3 years, and I won't have to worry about strata fees, and repairs. If something breaks it's not the landlord's responsibility. The shop owner has to fix it or he loses business :) If your bf has the money I would encourage you guys to consider diversifying your investments. So maybe put 75% of it as a down payment on a condo, and use 25% to buy a private REIT, agricultural land, or maybe something else in the exempt market to spread out the risk. I think it's a good long term investment to buy real estate, and there are many different ways to do it. Good luck.

You know we've never thought about commercial real estate before, I'll let him know to look into it. Do you find it's hard to find renters/leasers for commercial properties? I guess it depends on the property. I just always see so many retail places up for lease for months or even years on my way to work so to me it looks like it might be harder to find a renter/leaser. But maybe doing both would be an option. Thanks for the advice!

momoneymohouses said:

Also, just want to point out that I forgot to put an exclamation mark in the title, it's supposed to be a question but I don't know how to edit it after it's been posted.

Damn it, I meant question mark!