What is the minimum required investment level?
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Are there any restrictions on property resale?
What insurance coverage do I need for my income property?
Who handles the property management?
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What insurance coverage do I need for my income property?
Who handles the property management?
What happens if the value of my property decreases?
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What is a ‘condominium corporation’ and how does it work?
How can I protect against the vacancy of my unit?
Frequently Asked Questions
What is the minimum required investment level?
Our investment opportunity is suitable for you if you have a minimum of $150,000 to invest, and you want an affordable investment property that fits your budget. However, it depends on individual investor objectives and profile; the investment requirement may be as little as the downpayment to secure the mortgage to purchase the unit.
What happens if the value of my property decreases?
Property investment is typically a long-term proposition. Like other assets, real estate is a cyclical investment that may experience short-term fluctuations. But over the long term, real estate values have consistently kept pace with inflation. Successful investors usually buy and hold over a prolonged time frame.
Are there any restrictions on property resale?
There are no restrictions on reselling your property. Because you own the property (once the deal is completed), you have the flexibility to maintain ownership of it or sell it as you deem fit.
What is a ‘condo corporation’ and how does it work?
A condominium (condo) corporation is a legal entity that is created to divide a building or property into separate units that are individually owned and common elements owned by all the owners. The Condominium Corporation comprises all the individual unit owners of a given condo development. It is responsible for managing the common areas of that property. And it develops an annual budget for the shared expenses and administers the associated service contracts, insurance coverage, repairs and ongoing maintenance. These annual costs are allocated to each owner through monthly condominium fees. The unit owners have the right to attend Condominium Corporation Annual General Meetings and vote in matters related to the Condominium Corporation, including election of members of the Condominium Board. As unit owners in Select Properties developments, our investors have these same rights and privileges.
What insurance coverage do I need for my income property?
In most markets a Condominium Corporation (comprised of a property’s unit owners) is required to insure the building, its common facilities and any repairs against fire and third-party liability. The condominium fees typically cover the associated costs. Clients are encouraged to consider obtaining additional insurance to cover items within their units, such as appliances or furnishings.
How can I protect against the vacancy of my unit?
Vacancy rates are a source of concern for property investors. At Select Properties we offer a Vacancy Protection plan – a three-part strategy based on tenancy, property management and local market – designed to minimize the problem of unit vacancies. This Vacancy Protection plan is available to our Wealth Builder members.
Who handles the property management?
Select Properties collaborates with established property management companies in Ottawa to provide professional management services for our developments. We will arrange for one of these reputable property managers to manage the day-to-day operations of the property.
Can I live in my unit rather than rent it out?
Once you’ve acquired the property, you own it, and it is fully under your control. You can choose to rent it out or live in it yourself.
Do I get to choose my preferred unit in a building?
Yes. But unit allotment for each project is on a first-come, first-serve basis. You can reserve your preferred property unit by making a deposit, providing it is still available.
Can I use my own bank financing?
Absolutely. Our clients are welcome to use their preferred financial institution to finance the property purchase. Clients can also take advantage of Select Properties’ connections to financial institutions and mortgage brokers, which can facilitate the process and help get the best rates.
How does Select Properties evaluate income properties?
Our investment approach is based on a simple philosophy: minimize risk and maximize return for clients. Our research team constantly monitors real estate trends in Canada with a focus on the Ottawa area (National Capital Region). They analyze the trends and market factors to determine the short-term and long-term potential of prospective developments. The reports they generate provide the information necessary for Select Property Investment Associates to guide investors.
Am I obligated to buy right away?
No, there is no obligation to buy immediately. Once you have qualified as a potential investor with Select Properties, you decide when you want to invest. Whenever you are ready, just call us and an Investment Associate will be happy to help you get started on your income property investment journey. Only clients who qualify for the Wealth Builder Program will receive updates on upcoming projects and opportunities in the interim period. During that time, they are free to discuss projects and strategies with a Select Properties Investment Associate, ensuring that they don’t miss out on any offers and can readily seize the opportunity when the right one comes up.
What are the benefits of joining the Wealth Builder Program?
Wealth Builder members enjoy a wide range of exclusive benefits. These include a thorough assessment of client needs, financial goals, investment objectives, risk tolerance, and financing options. Based on the needs assessment, we develop an income property investment strategy tailored to fit the client’s budget and financial goals. Each member receives a comprehensive report which details the property investment strategy based on the individual’s unique investment profile. Moreover, Wealth Builder members receive exclusive access to advanced previews of new development projects; they also enjoy preferred rates on legal fees, management fees, and lending rates. They have complimentary access to due diligence reports and 3rd party independent appraisal reports; and they receive ongoing guidance and support, and one-to-one consultations, with a dedicated Select Properties Investment Associate.
Is there a fee to join the Wealth Builder Program?
There is a one-time administrative fee of $500. This fee is tax deductible, and the full amount applies as a credit towards your first income property investment with Select Properties.
How do I qualify for a Wealth Builder membership?
Select Properties employs the same key criteria as the banks and other financial institutions to assess and qualify prospective investors: income, net worth, and creditworthiness.
Why join your Wealth Builder program?
Our Wealth Builder program enables you to buy and own your property, take a backseat and watch your investment grow. You will not have to deal with the hassle of being a landlord, as a professional property manager will handle the day-to-day running of your property for you. If you’d prefer to be a hands-off investor – just buy and own a property – and simply let your money work for you, then our Wealth Builder program is the right fit for you.
What is the Wealth Builder Program?
The Wealth Builder Program is a solutions-based program that is designed to overcome many of the challenges associated with real estate investment. It is a unique program developed exclusively for Select Properties clients. Through the Wealth Builder Program Select Properties provides clients with tailor-made solutions for property investment including research, financing arrangements, acquisition support, property management options, as well as ongoing education, advice, guidance and support.
How do I get started investing in income properties?
The first step is to book an initial consultation with a Select Properties Investment Associate to discuss your needs and goals for real estate investment. This process helps to identify suitable options based on your investment profile and budget. Once you have been qualified as a potential investor with Select Properties, the next step will be to join our Wealth Builder Program.
What are the benefits of buying a property to rent it?
Buying a property to rent is a secure investment that provides stable income with the potential for capital growth. By purchasing a property and renting it out, you can generate a steady stream of rental income. The key is to find a quality long-term tenant. There is also the potential for your property to appreciate over time. Depending on the location of the property, you can experience significant value appreciation (increase in your property’s value) over the long term.
What are the tax advantages of income properties?
Real estate investments enjoy certain tax advantages compared to other asset classes, ranging from tax shelters to deferred taxes on gains. Because each investor’s tax status and investment profile are unique, we recommend that clients consult with a tax specialist to determine a suitable tax strategy.
Isn’t real estate susceptible to rising interest rates?
Interest rates significantly affect real estate markets. Higher rates tend to decrease affordability, lowering demand and prices. Equally, anticipation of further rate increases may stimulate buying and temporarily raise prices. A rising interest rate situation can favour the income property investor as fewer people can afford to buy their own home, creating a larger pool of renters and lowering vacancy rates. However, an investor who has a variable interest rate mortgage with fixed payments can be more vulnerable to rising interest rates as more of each mortgage payment goes toward interest costs. Conversely, if the interest rate goes down, more of each payment goes towards the principal, making it possible to pay off the mortgage faster. Every investor’s risk appetite is different.
Why should I invest in real estate?
Real estate allows investors to diversify their portfolios and is a stable choice during periods of volatility. Real Estate investment is a compelling option for long-term capital growth and financial stability. Property has the characteristic of appreciating in value over time. Value appreciation can result in substantial capital gains when you decide to sell your property in the future. Rental yield is another factor to consider when purchasing an income property which can generate a steady stream of rental income. Rental yields vary depending on the location and property type. But at Select Properties, we conduct diligent research and market analysis to identify neighbourhoods with strong rental demand and attractive returns.
What is an investment property?
An investment property is a property you purchase with the aim of earning a return on your investment. An investment property provides current income and future capital growth. By renting the property, the investor earns stable rental income. Capital growth is achieved as the value of the property appreciates over time. To maximize returns, property investment is typically a long-term proposition (buy and hold over a prolonged time frame).
What is an income property?
An income property provides the investor with a steady stream of rental income with a potential for capital appreciation (increase in your property’s value over time).
Why must I buy from Select Properties?
Select Properties offers clients opportunities to invest in income properties that they buy and own directly. We also help you with investment strategies to generate stable monthly income.
What are the benefits of your property management service?
If you’d prefer to avoid the time-consuming process of vetting tenants, maintaining your property, and making sure rent is paid on time, then our property management solution is for you. Our property management partners will handle all that for you, saving you time and hassle. You will also have satisfied tenants as the property managers will take care of your tenant needs.
Who are Select Properties?
Select Properties is a full-service real estate investment firm based in Ottawa, Canada. We help clients create wealth and generate income by providing them opportunities to invest in affordable turnkey income properties. We offer our clients additional support and services and guide them in their investment journey from initial consultation to exit strategy.
What is Select Property’s project development record?
Select Properties is a young firm but benefits from its association with Oakwood Design & Build. OakWood is a well-established and reputable Ottawa builder since 1956 with an excellent track record that is second to none. By partnering with OakWood, Select Properties can leverage OakWood’s proven building technology and solutions – ranging from investment property services to construction and project management – to complete our development projects.
Advantages of Turnkey Income Properties
Real estate allows investors to diversify their portfolios and is a stable choice during periods of volatility. Real estate returns have consistently outpaced inflation over the long term. Income property investment provides secure income with potential for capital growth.
Turnkey Income Property offers current income and future capital appreciation. Appreciation is realized as your property increases in value over time (long-term appreciation). Appreciation provides an opportunity for investors to leverage the equity in their property to re-invest in higher-value properties, or to secure a line of credit to support additional investments.
Use your monthly rent receipts to make your mortgage payments. First, for a small down payment, the bank provides you with a mortgage that covers most of the property’s purchase price – effectively “buying” the property for you. Second, by renting out your property, your tenant effectively “pays off” the mortgage for you through the monthly rental payments. Given the right property and the right tenant(s), you can earn stable rental income over the life of the mortgage, eventually becoming mortgage-free. Thus, with minimal initial cash outlay, you will ultimately own the property free and clear. Few investments can offer such unique benefits.
Leverage gives you the opportunity to increase the financial resources available to you for investment. The idea is to take advantage of a mortgage loan to increase the return on your investment without having to put as much of your own capital into buying a property. For example, say you have $100,000 cash to invest. Rather than spend the whole $100,000 to buy just one property, you might leverage that same $100,000 capital to finance the down payments on two or three properties. You can then borrow the funds to cover the remainder of the purchase price for each property. Because appreciation is measured by the full value of the properties and not by the size of your down payment, leverage multiplies your returns substantially. Moreover, as the mortgage is amortized (paid down), your equity increases, creating more funds to invest in other properties, which in turn increases your leverage.
Caution: Leverage has its upside potential and downside risks. It works to your advantage when real estate values rise, but it can also lead to losses if values decline. Therefore, at Select Properties, we guide you to use leverage wisely.
Tax Advantages of Income Properties
Real estate investing offers several tax advantages including tax-sheltered profits, tax deferral, tax-free cash flow, tax deductions, and capital gains tax treatment. Depending on your unique investment objectives and circumstances, you may benefit from these tax incentives. Before investing, make sure to talk to your Select Properties Investment Associate about potential tax benefits and explore opportunities suitable for your specific situation.
Tax-sheltered Profits
As a real estate investor, you can cash out a portion of your profits without incurring taxes, if you refinance the property with a new mortgage and reinvest the tax-free profits in the new mortgage. This way, 100% of the profits you cash out are put to work for you.
Tax Deferral
The gains in real estate due to appreciation are not taxed until you sell the property. For example, say you bought a property for $100,000 and in 5 years’ time it appreciates in value to $175,000. The $75,000 gain in the value does not incur taxes until you sell the property. This allows your investment to grow tax-free year over year with compounding effect.
Capital Gains Tax Treatment
When you sell your property for more than the price at which you purchased it, you earn a profit due to appreciation (increase in the property’s value over time). Since real estate appreciation profits are treated as capital gains, only 50% of the gain is taxed. In contrast, interest income (from bonds and GICs) is taxed on the full amount of the gain.
Tax-free Cash Flow
As a real estate investor, you can claim depreciation as a deduction, allowing you to reduce your taxable income each year. Capital Cost Allowance (CCA) is the term used for depreciation for tax purposes. You can offset the positive cash flow generated (excess of revenue over expenses) by claiming CCA. By means of CCA write-offs, you can maintain tax-free cash flows until you sell the property. This unique tax deferral opportunity provides a substantial advantage for real estate investors.
Tax Deductions
As a real estate investor, you can claim several financing and operating costs as deductions against rental income, allowing you to reduce your taxable income. For example, you can deduct the interest paid on your mortgage to lower your tax liability. Other possible deductions under this category include property management fees, property taxes, and repair & maintenance costs.
Direct Equity Ownership
Select Properties offers 100% ownership of the property. This means the title deed is in your name. And this gives you full control and flexibility over your investment.
Affordable Properties
At Select Properties, we offer affordable turnkey income properties in neighbourhoods with strong housing demand, starting from $150,000. This makes the investment affordable for those who want an investment property that suits their budget.
Durable Monthly Cash Flows
At Select Properties, we only deliver projects that offer the potential for a strong return on your investment. Through our strict due diligence process we make sure that our properties are in stable markets with strong demand and offer durable current income and growth opportunities.
Hassle-free Property Management
Select Properties works with some of the best property management companies in the Ottawa area. We can arrange for one of these local third-party service providers to manage your property for you. They will take the hassle out for you by taking care of property maintenance, tenant screening and tenant needs, rent collection and more. They will also provide regular financial statements with monthly statements forwarded directly to you. Low group rates are available with this option.