Expenses to consider as an Investor - June 2023

Expenses for Investors

know your expenses prior to purchasing a rental property

When purchasing a condo as an investment to rent out in Toronto, there are several monthly costs to consider. Here are some of the key expenses you should take into account:

Mortgage Payments: If you are financing the purchase with a mortgage, your monthly mortgage payments will be one of the most significant costs. The amount will depend on factors such as the purchase price, down payment, interest rate, and the length of the mortgage term.
Property Taxes: Property taxes are an essential expense for condo owners. The municipality assesses property taxes based on the value of the property, and the amount can vary depending on the location and size of the condo. These can also rise over time.
Condo Fees: Condo fees, also known as maintenance fees or strata fees, are regular payments made to the condominium corporation to cover the maintenance and management of common areas and amenities. These fees can vary widely depending on the size of the unit, the building's amenities, and the services provided.
Insurance: You will need to purchase landlord insurance to protect your investment property. This insurance typically covers the condo unit, liability, and loss of rental income due to unforeseen events. The cost of insurance can vary based on factors like the property's value, location, and coverage options.
Utilities: As the owner, you may be responsible for paying some or all of the utilities, such as water, electricity, and gas. The exact utilities that you need to cover will depend on the specific arrangements with your tenant.
Repairs and Maintenance: You should allocate funds for ongoing repairs and maintenance. Condos generally have fewer maintenance responsibilities for individual unit owners compared to houses, but there can still be occasional costs for repairs or upgrades within your unit.
Property Management Fees: If you plan to hire a property management company to handle tenant selection, rent collection, maintenance, and other property-related tasks, you will need to consider their fees. Property management fees are typically a percentage of the monthly rental income.
Vacancy Costs: It's important to account for potential periods when the condo may be vacant and not generating rental income. You should set aside funds to cover mortgage payments, condo fees, and other expenses during these periods.

It's crucial to conduct thorough research, evaluate the local market conditions, and consult with real estate professionals or financial advisors to get a clear understanding of the costs specific to your investment property in Toronto.

Expenses to consider as an Investor - June 2023

When purchasing a condo as an investment to rent out in Toronto, there are several monthly costs to consider. Here are some of the key expenses you should take into account:

Mortgage Payments: If you are financing the purchase with a mortgage, your monthly mortgage payments will be one of the most significant costs. The amount will depend on factors such as the purchase price, down payment, interest rate, and the length of the mortgage term.

Property Taxes: Property taxes are an essential expense for condo owners. The municipality assesses property taxes based on the value of the property, and the amount can vary depending on the location and size of the condo. These can also rise over time.

Utilities: As the owner, you may be responsible for paying some or all of the utilities, such as water, electricity, and gas. The exact utilities that you need to cover will depend on the specific arrangements with your tenant.

Repairs and Maintenance: You should allocate funds for ongoing repairs and maintenance. Condos generally have fewer maintenance responsibilities for individual unit owners compared to houses, but there can still be occasional costs for repairs or upgrades within your unit.

Property Management Fees: If you plan to hire a property management company to handle tenant selection, rent collection, maintenance, and other property-related tasks, you will need to consider their fees. Property management fees are typically a percentage of the monthly rental income.

Vacancy Costs: It's important to account for potential periods when the condo may be vacant and not generating rental income. You should set aside funds to cover mortgage payments, condo fees, and other expenses during these periods.

It's crucial to conduct thorough research, evaluate the local market conditions, and consult with real estate professionals or financial advisors to get a clear understanding of the costs specific to your investment property in Toronto.