Hi everyone
I’m a newbie investor seeking buy and hold property in Alberta, Canada. We have a group of 3 investors pooling $30,000 CAD each in our company. I would like advice whether it would beneficial to put 5% down as apposed to 25% down.
Our objective is to obtain several properties at once and we feel that if we put only 5% down on a house, we will have sufficient funds to look for another property and hence, more IP’s.
What is everyone’s take on this??
Doug
Hi, I am pretty new to this too, but the 1st thing that come to my mind is – Wouldnt your loan be larger if you put 5% deposit? hence larger payments? however by putting in 25% you would have to borrow less, try to get the property +ve geared and save up to buy another one later.
Hello e-town
To begin with I don’t know anything about investing in Canada, so be warned. [smiling]
Is a company a good structure in Canada for a buy and hold property investing strategy? I assume you have checked this out with a good property investing savvy accountant?
Wether you put down 5 or 25% deposit is dependent on what sort of properties you can get there. Will they be positive or negative cash flow at 5% deposit or in fact at 25% deposit.
If you only put down 5% are your borrowing costs a lot higher?
Personally if you are all new to property investing I would first spend lots of time on research and education and then start with just one property. This will give you the chance to learn “on the job”.
Good luck
Elka
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