This is Abdul from Ottawa (Canada). Im working as a IT Contractor in Government, Ottawa .
We are planning to buy our first home in canada . We are confused whether to buy Owner Occupied Property (small liability) in Ottawa to live (or) to buy cashflow property in Windsor .
Can anyone tell us whether to buy the owner occupied single garage property (CAD 460,000 to 550,000) in Ottawa (OR) Cashflow property (CAD 250,000 to 350,000) in Windsor good. Which one is bettter to buy
We are living in Ottawa in Rental Apartment now
Please guide us (owner occupied small detach house with no cashflow {or} cashflow property in other city)
Investor · Nipomo, CA · Member since 2014 · 366 posts · 401 votes
7y
@Abdul Mubeen This is a hard one to answer without knowing more about your current situation and goals. What is your current rent vs what would your mortgage payment be on an owner occupied? What is it that is motivating you to pursue an owner occupied vs continuing to rent? Conversely, what it is that is motivating you to purchase a rental instead of an owner occupied?
Sorry for all the questions, but to properly answer it seems a bit more info could be helpful.
It depends on how much you are paying in rent and how much you'd get for rent. In some cases it isn't a bad idea to buy a rental while you are renting.
In Canada, your minimum down payment for a rental is different than for your own home. Home owners can put down a smaller down payment of 5% though you will also have to pay for CMHC insurance and first time home buyers can use RSP contributions (you will have to pay it back). For rentals, you need to put 20% down.
Personally I would do neither. I would stay renting for now and purchase a income property some where closer to Ottawa that you can self manage. Something within about an hr of your location. There are plenty of smaller towns around Ottawa (Arnprior for example) where you could more affordably invest and self manage.
Investing in Windsor and using a PM for a new investor is going to be more headache than you need.
Rental Property Investor · Salem, NH · Member since 2016 · 460 posts · 276 votes
7y
@Abdul Mubeen Your first home should be whatever you are looking for. Are you buying for cash flow? For appreciation? What are your Real Estate Goals?
You can Owner Occupy a Two, Three or Four-Family and be mortgage free. If you buy an Investment Property you will pay a higher interest rate and will likely need 20% down. This will also make it more difficult to buy your next home as you are taking on a big liability that will effect DTI.
There is so much to consider here and I don't think there is nearly enough info provided above to help!