Is anyone owning two houses in Mississauga. one for self use and living-in and other for rental income. I want to understand how much money you can get out of rental property. If the mortgage payments are less is there potential of some left over money from the rental income to run monthly expenses.
buying house in ontario for rental income
- Thread starter blueshirt
- Start date
blueshirt said:
Your question is way too broad. The prices of houses and the rent you can obtain varies extremely widely between different locations in Ontario. A semi in downtown Toronto can easily set you back well over a million. The same property in a less urban area could be a fifth (or even less) of the downtown Toronto price.
My question is not for buying new property. I am asking if you have a property lets say a detached house with separate entrance for basement if we rent out the property with 2 tenants one occupying basement and other rest of the house how much monthly money one can get from rent. I understand the utilities is the responsibility of tenant so how to divide the usage unless we put 2 meters for water/electricity/gas.
can we make enough money from rent that we pay some portion of income into mortgage and some use it for monthly expenses as source of secondary income.
I think someone already in this situation who has rental property may be the right person to reply this post. Others who don't have rental property still can give suggestions.
can we make enough money from rent that we pay some portion of income into mortgage and some use it for monthly expenses as source of secondary income.
I think someone already in this situation who has rental property may be the right person to reply this post. Others who don't have rental property still can give suggestions.
scylla said:
blueshirt said:
Again this is very situational. Some rentals includes utilities - Tenant have no responsibility/obligation to pay directly to utilities companies although they enjoy the services.
You might want to check with the local city hall and/or strata council (in case of condominium) whether there are any laws restricting more than one family occupying at one time (especially if the basement is not a legal suite). If such law exists and someone reported, there could be a problem.
I am asking renting out a legal way with proper documents and paying tax to CRA. anyone who has this kind of income earning can share his or her experience? I understand utilities can be inclusive of rent or exclusive. but inclusive based on human nature people may misuse.. if we do separate utilities how to charge two tenants. And is the utility owner ship transferred to tenant in case its a single tenant occupancy.
thanks guys steaky and zardoz do you own rental property and can suggest me based on above specific query. Once again lets assume we are discussing all legal things and also paying tax and getting the income in bank and informing CRA.
thanks guys steaky and zardoz do you own rental property and can suggest me based on above specific query. Once again lets assume we are discussing all legal things and also paying tax and getting the income in bank and informing CRA.
You need to tell us if the property where 2 tenants will be is already bought for or will there be a mortgage on the house or bought outright. It is not clear from your post as you did mention a mortgage.
Please note that if you do decide to rent, mortgage interest in not a CRA allowable expense, so you need to take that into consideration.
I can tell you this.
I am in Thailand and I am renting my Toronto condo.
As of now there is still 50% mortgage on the condo, meaning almost half of it is paid off.
I am barely making a profit on it.... maybe $50 a month. In my condo utilities are included in rent, meaning they are part of the condo fees.
Please note that if you do decide to rent, mortgage interest in not a CRA allowable expense, so you need to take that into consideration.
I can tell you this.
I am in Thailand and I am renting my Toronto condo.
As of now there is still 50% mortgage on the condo, meaning almost half of it is paid off.
I am barely making a profit on it.... maybe $50 a month. In my condo utilities are included in rent, meaning they are part of the condo fees.
the property is on mortgage as I mentioned if we get rental income part will go in mortgage and part in our pocket. so this amount which can go in pocket how much it may be. lets say mortgage payment per month is $1400. so can a detached house lets say 2000 square feet with finished basement and 5 bedrooms can it be easily rented out at least lets say for $2700/month. so the in hand cash will be 2700-1400 = $1300/month. Not so bad income. lets say utilities is tenant responsibility. I will pay the house tax yearly and pay the interest tax to CRA yearly. lets not subtract that expense money now just calculated rent - mortgage = monthly in hand cash.
mrbeachman said:
It's still situational and location dependent. I'll give you an example from my neighbourhood in case it helps.
Let's say you buy a semi-detached with a basement apartment that you plan on renting. Decent semis are $1 million plus (as a reference point, a small empty lot recently went for $700,000). So let's say you've paid $1 million for the semi and it has a basement apartment you can rent immediately. How much of a mortgage you have will obviously depend on how much of a downpayment you paid. However probably safe to assume the mortgage will be north of $1400 per month.
These semis are not large so the basement apartment will be 1 bedroom tops. Assuming it's nicely renovated, you could probably get $1600-$1800 a month in rent.
Let's say you buy a semi-detached with a basement apartment that you plan on renting. Decent semis are $1 million plus (as a reference point, a small empty lot recently went for $700,000). So let's say you've paid $1 million for the semi and it has a basement apartment you can rent immediately. How much of a mortgage you have will obviously depend on how much of a downpayment you paid. However probably safe to assume the mortgage will be north of $1400 per month.
These semis are not large so the basement apartment will be 1 bedroom tops. Assuming it's nicely renovated, you could probably get $1600-$1800 a month in rent.
Top two floors together would probably be around $2400-2600. So let's say $4000 for the whole house rented assuming the house was purchased for $1 million. If the house is recently renovated then you would get more. However a recently renovated house will run you more like $1.2 or $1.3.
Keep in mind that you also need to factor in additional expenses, such as property taxes, which are above and beyond your mortgage. Property taxes alone will run you several thousand dollars extra per year.
Keep in mind that you also need to factor in additional expenses, such as property taxes, which are above and beyond your mortgage. Property taxes alone will run you several thousand dollars extra per year.
blueshirt said:
Your best bet is to go onto www.mls.ca and see for yourself what rental levels are in the area that you are considering. Rents in the GTA can vary from $700 per month up to $15,000 per month. No one can tell you what the income you can expect is without understanding what type of house you are looking at, where it is located, what condition it is in, etc.
When you do your math, make sure you consider property taxes, agent fees (typically 1 months rent), periods where you may not be able to find a tenant, maintenance costs, insurance, etc. In my experience, you are lucky if your rent covers all expenses, but it is extremely rare for a property to yield sufficient excess cash flow to provide you with incremental income. That is because over the last few years, housing price increases have outpaced rent increases, thereby decreasing the overall rental yield.