Interesting information can be found in a new May 2018 CIBC report. Here is synopsis of the report:
- Every fourth Canadian homeowner is already a landlord. People rent out either their primary residence or their rental properties. Sometimes even both;
- The average amount they earn in income is $1,287 each month;
- 72% of homeowners believe that real estate is an excellent way to earn additional income;
- Another interesting finding in the report is that 37% of homeowners say that if they would buy home today, they would buy it with a source of rental income
However, for me as a professional, a pleasant surprise was a way of thinking of a younger generation – millennials. Almost half of Canadians aged 18-34 are already renting out. Moreover, when buying a home twice as many millennials compared to boomers try to buy it with a possibility to rent part of it.
Authors of the report make a great statement that younger Canadians are more open to sharing their space because they see it as financially advantageous. It is definitely a shift in attitudes to income properties.
We hear often that to be a landlord it is not for everyone. It is true. We have to remember about headache that some challenging tenants create for us. Top concern of most landlords is dealing with unexpected costs for maintenance and repairs. Despite this, more than half of landlords (52 per cent) believe it’s “worth the headache”.
Why Canadians buy rental properties? Half say their top reason is to generate passive income now (22 per cent) or in retirement (28 per cent). Another 20 per cent have invested for long-term property appreciation, and only 14 per cent buy for future occupancy by themselves or their children.
Being a landlord myself I can tell it is not an easy money, but it is financially rewarding. You don’t need to have a business training to be a successful landlord. Most of knowledge comes with experience. But to buy your first investment property you definitely need a good team near you. First of all a good accountant and a good realtor.