Hi there. I am just in the process of joining REIN and have a question. I have purchased my first townhouse property and will this and my current house my ratios would not allow another townhouse. Is there another way to do this? Do I push the townhouse into a corporation or is there a better way?
GDR and TDR
- Thread starter Sclice
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QUOTE (Sclice @ Jul 14 2009, 10:14 AM) Hi there. I am just in the process of joining REIN and have a question. I have purchased my first townhouse property and will this and my current house my ratios would not allow another townhouse. Is there another way to do this? Do I push the townhouse into a corporation or is there a better way?
Two ways to improve debt ratios:
a) have less non-income producing debt (CC, car loan, personal residence,...)
AND
b) buy more properties where the income - 50% expenses is higher than the debt payment i.e. "neutral" or even positive to your income !
Two ways to improve debt ratios:
a) have less non-income producing debt (CC, car loan, personal residence,...)
AND
b) buy more properties where the income - 50% expenses is higher than the debt payment i.e. "neutral" or even positive to your income !
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In order to calculate your debt service ratios, some more information would be required. If you purchased a townhouse for your residence, did you qualify based on your income? If so, and as long as your other debts have remained relatively the same, you should be okay.
You may not be considering that the banks will use the rental income from a rental property to offset the mortgage payments. Every bank will use some percentage of the rental income to your credit. If you are buying properties with good cash flow, then as long as your personal expenses are in line with your income, then you should not have a problem.
You may not be considering that the banks will use the rental income from a rental property to offset the mortgage payments. Every bank will use some percentage of the rental income to your credit. If you are buying properties with good cash flow, then as long as your personal expenses are in line with your income, then you should not have a problem.
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Sit down with your mortgage broker and plan ahead for what you are trying to accomplish. Like Rob said, more info is required to give you any advise that would have value to you. There are many ways to do the real estate business, but knowing where you are going is a major step.