How Soon After Rental Purchase Can I Reappraise? (Canada)

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Just closed on my first rental property in Alberta and got a pretty good deal on a foreclosure - all is looking good so far! 

Along with the sale I applied and got accepted to open up an equity-secured LOC. I'm planning on using this LOC to finance down payments for future rentals. Unfortunately, they appraised the home with the sale and it came at exactly what our purchase price was, so the LOC won't be worth anything right away. Judging by comps on the area I bought in, it SHOULD appraise for $140 - $150,000 after everything is fixed up.

My question is, how long should I wait to get it re-appraised? I'm thinking May once all the fixes have been completed but should I wait longer? Do banks typically appraise higher if someone is living in the home? I sent an email out to my bank but any advice is appreciated.

@Colton Potter

Was this a cash purchase, or is the house presently financed?   If the LoC/financing through the lender from whom the house was purchased?

There is no statutory period you must wait after purchase before (re)financing the property.  Individual lenders will have guidelines on how soon they will refinance a property that was financed at the time of purchase.

In situations like yours, we typically wait until all the make-ready renovations are completed before (re)financing the property.  However, occasionally there is sufficient baked-in equity in an acquisition that we have refinance sooner (as short as 30-days).

If the home is inhabitable, it should make no difference to the appraisal whether there is presently a tenant or not ... sometimes it is easier for an appraiser when the property is empty.    Conversely, it may make a difference to your refinancing of the property.  Banks love to see annual leases - and include an assignment of rents covenant in their financing agreement.

Originally posted by @Colton Potter :

Just closed on my first rental property in Alberta and got a pretty good deal on a foreclosure - all is looking good so far! 

Along with the sale I applied and got accepted to open up an equity-secured LOC. I'm planning on using this LOC to finance down payments for future rentals. Unfortunately, they appraised the home with the sale and it came at exactly what our purchase price was, so the LOC won't be worth anything right away. Judging by comps on the area I bought in, it SHOULD appraise for $140 - $150,000 after everything is fixed up.

My question is, how long should I wait to get it re-appraised? I'm thinking May once all the fixes have been completed but should I wait longer? Do banks typically appraise higher if someone is living in the home? I sent an email out to my bank but any advice is appreciated.

 House will be valued higher after renovations so you should appraise after completion. If you thinking to refinance it as a rental then its better for it to be occupied with a lease so the rental income can service the debt and free you to purchase another property with a mortgage

Good luck

Originally posted by @Roy N. :

@Colton Potter

Was this a cash purchase, or is the house presently financed?   If the LoC/financing through the lender from whom the house was purchased?

There is no statutory period you must wait after purchase before (re)financing the property.  Individual lenders will have guidelines on how soon they will refinance a property that was financed at the time of purchase.

In situations like yours, we typically wait until all the make-ready renovations are completed before (re)financing the property.  However, occasionally there is sufficient baked-in equity in an acquisition that we have refinance sooner (as short as 30-days).

If the home is inhabitable, it should make no difference to the appraisal whether there is presently a tenant or not ... sometimes it is easier for an appraiser when the property is empty.    Conversely, it may make a difference to your refinancing of the property.  Banks love to see annual leases - and include an assignment of rents covenant in their financing agreement.

Financed through RBC, and yes, the LOC is secured through them. Appreciate the help!

Hey @Colton Potter ,

My mortgage broker let me know that the big banks have been tightening their refi rules and are making you hold the property closer to a year. We just started a project with Scotia and I was told that I wouldn't be able to refi until i've held it for a year to get the total new appraised value. We could refinance after 6 months, but they would only give us the amount we spent on the reno. I would inquire directly with RBC to find out.