Evaluate rental property financing beyond the purchase price
A rental property analysis should connect financing terms to the operating reality of the property. Rent, vacancy, repairs, taxes, strata fees, and debt service all affect the decision.
Stress-test the monthly cash flow
Use realistic rent and expense assumptions rather than a best-case scenario. A good plan allows room for vacancy, repairs, and changes in rate at renewal.
- Estimate rent conservatively
- Include taxes, strata, insurance, and repairs
- Set aside a vacancy and maintenance reserve
Know the down payment and income rules
Rental-property qualification can differ from an owner-occupied purchase. Lenders may use different rental-income approaches and minimum down-payment requirements.
- Confirm property type and occupancy
- Review how rental income may be treated
- Protect personal cash-flow capacity
Plan for exit and renewal
A purchase should still make sense if your rate, rent, or expenses change. Model more than one scenario before you commit.
- Test a higher renewal rate
- Consider selling costs and liquidity
- Review your long-term hold strategy
This guide is educational and general in nature. A full mortgage strategy depends on your income, credit, property, lender, and timeline.