More than 40 per cent of locals have invested or plan to invest in rental property to support retirement income, according to survey
Joannah Connolly
Other
As real estate values continue to rise in Metro Vancouver, more Vancouverites are considering investment rental property as part of their retirement planning, according to a new survey by BlueShore Financial.
The Investment Rental Property Survey found that 42 per cent of the respondents have invested or intend to invest in real estate as part of their retirement planning future. Of this number, half already own investment rental property, and the remainder either have firm plans to buy or are considering buying – the majority of those (64 per cent) within the next five years.
Respondents who currently own an investment rental property noted that they primarily did so for future retirement (49 per cent) or to capitalize on rising real estate values (44 per cent).
Condos were cited as the leading type of rental property, with 45 per cent of those who have an investment property owning a rental condo, followed by single-family homes (29 per cent) and townhomes (14 per cent).
Among those who hope to invest in a rental property in the future, the most common reason (60 per cent) was cited as an investment for retirement. This was followed by the desire to generate monthly income (54 per cent), and to take advantage of low mortgage rates (40 per cent).
Other key findings include:
- The highest proportion of rental-property-owning respondents spent less than $300,000 on their rental property (34 per cent), followed by between $300,001 and $450,000 at 27 per cent.
- Just over half of respondents (53 per cent) funded their rental property down payment or purchase by drawing on savings, followed by using a home equity line of credit (18 per cent), carrying a mortgage on their primary residence (16 per cent), and using a family-financed option (14 per cent).
- The most important mortgage features that respondents look for when financing their investment property are borrowing rates (67 per cent), flexibility of repayment options (40 per cent) and amortization period (23 per cent).
“With housing values continuing to reach record highs and interest rates dropping to record lows, we’ve seen a notable increase in interest from our clients within the investment rental property market – especially as a means to plan for retirement,” says Kristine Skinner, Financial Advisor at BlueShore Financial.
© 2015 Real Estate Weekly