Scott McGil­livray on how to get into the in­come prop­erty biz

The ins and outs of be­com­ing a real es­tate in­vestor by Nikki Gill

Bayview Post - - Homes -

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’

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