Scott McGillivray on how to get into the income property biz
The ins and outs of becoming a real estate investor by Nikki Gill
When it comes to income properties, everyone’s favourite expert is HGTV Canada’s Scott McGillivray. Prior to hosting shows such as and McGillivray began investing in income properties himself at age 21.
So, with a couple of decades of experience under his belt, we decided to tap his expertise to find out where to begin if you’re thinking about renting out part of the family home, buying a condo to rent or possibly getting into the Airbnb scene. What are the pros and cons of buying a condo as an income property versus a house? It really depends where you are and what the rental market is like. In a city like Toronto a condo can be a great investment.
This city has a lot of renters, so finding a tenant should be easy. And with condo prices still rising, it’s a great opportunity to build equity while someone else pays down your mortgage.
With condos there’s also less maintenance to worry about. What type of income suite will give you the best return on your investment? two bedroom can be rented to a young family, empty nesters who want a guest room or office or single people who want to live with roommates.
With bachelors CARPET AREA RUGS SISAL HARDWOOD LUXURY VINYL LAMINATE CORK WINDOW COVERINGS What would you recommend to an empty nest couple who is looking to earn extra income? Turning an unused basement into an income suite is always at the top of my list. And what’s great for empty nesters is that, if they’re used to having kids in the house, they won’t be bothered by any additional noise. Plus any improvements they make will add to the value of the house. Another option is to do shortterm room rentals, or house foreign exchange students in the extra bedrooms. It’s not for everyone, but if you miss having kids in the house, it can be a great way to get some company and some extra cash. Short-term Airbnb-style rental suites versus long-term rentals: which one is a better and safer investment for a homeowner? I’m a fan of long-term rentals because of the consistency and minimal turnover. As a general rule they take less work.
With short-term rentals you’re constantly screening tenants, hiring cleaners and so on. With long-term rentals you only have to do this once a year or less.
However, these Airbnb-style rentals have opened up a world of possibilities. Not only can you rent out dedicated income properties through these sites (vacation homes for example), you can rent out your primary residence when you go away on vacation or even for the weekend.
It’s a great opportunity for millennials and other people who are looking to dip their toe in the rental business. For those looking to renovate first, which room will give them the most value? The kitchen is always considered the number one room in the house when it comes to return on investement, with bathrooms following closely behind.
But if you have an unfinished basement, I would definitely recommend finishing it. You increase the living space of your home (or you can turn it into an income suite) and that’s a huge plus.
McGillivray hosts television shows ‘Income Property’ and ‘Buyers Bootcamp’