Can I afford an investment property?

ambujakshi wrote: ↑ Is there a calculator that shows affordability for an investment property? Or I have to go to the bank and check ?

I'm going to go right ahead and say no, you can't and shouldn't afford an investment property.
But yes, go to the bank and check.

I think the first thing to do is work out your budget. How much is the property going to cost you, how much will it bring in each month. There's tons of sites on the web to help figure out what kind of costs you can expect.

C

You simply have to work the math yourself. Need to understand your current debt to income ratio. If you have a house and a mortgage, can you get HELOC out of it and is that enough for a down payment. Then calculate how much of a down payment you need to get a positive cash flow. In the end, you still need to go to the bank to confirm how much they are willing to lend you.

I've no other debt other than my mortgage of my primary residence. I see calculators in sites like ratehub that show the affordability for first home purchase, but not the 2nd.

I want to diversify my investments. I know housing market is volatile, just like any other investment, but in the long run, as long as you can buy in the right place(close to transit), it works out good.

ambujakshi wrote: ↑ Is there a calculator that shows affordability for an investment property? Or I have to go to the bank and check ?

The debt-service ratio calc is complicated for an investment property (differs from lender to lender). Talk to a bank or broker...you won't find anything good online.

Do you mean if you will be able to get a mortgage?

Or are you asking other than a mortgage can you afford it. Meaning the typical costs

rfdrfd wrote: ↑ Do you mean if you will be able to get a mortgage?

Or are you asking other than a mortgage can you afford it. Meaning the typical costs

Asking if they will approve my mortgage.

Even if they approve your mortgage based on your income and debts, you still need to make sure that u dont have an unsecured job that may lay u off soon, and that you will not have big unexpected outlays (wife not working, kids, etc). The economy has been good since 2009, and the future is not that certain (NAFTA collapse, rising interest rate, high household debts, etc)

ambujakshi wrote: ↑ Asking if they will approve my mortgage.

I say there's only one sure way to find out. Try it.

Beefeater wrote: ↑ Even if they approve your mortgage based on your income and debts, you still need to make sure that u dont have an unsecured job that may lay u off soon, and that you will not have big unexpected outlays (wife not working, kids, etc). The economy has been good since 2009, and the future is not that certain (NAFTA collapse, rising interest rate, high household debts, etc)

Exactly. Any responsible spouse should do that. Plan for what if you died today, will your family be okay?

On a side note, whenever I hear on the news, a Dad died, leaving behind 3 kids and a wife with debt, while it's super sad, I can't help but wonder why they weren't prepared? If you can't afford it, don't have kids. Not all kids are accidents, maybe the first one.

As a husband, I view one of my main responsibility is to ensure my family is financially sound if I die today.

In this day and age, getting hurt or killed is highly probable. Turn on CP24, someone just died this morning. Sad, but it's real.

Bottom line, have a plan, don't leave your wife and family in trouble that you got into and cannot afford .