Leveraging a Second Property: What to Know Before You Invest in Real Estate
Owning your home is a milestone. But for many Canadians, the next question becomes:
what’s next?
For some, it’s the idea of a second property: a rental suite that generates income, a vacation home for family getaways, or a long-term investment to grow wealth.
The opportunities are real, but so are the responsibilities. Before you dive in, here are a few things to consider.
Why Invest in a Second Property?
Income Potential: A rental property can provide steady monthly income to offset mortgage costs or build savings.
Long-Term Wealth: Real estate has historically appreciated over time, creating equity and financial security.
Lifestyle Benefits: A vacation property doubles as a personal retreat and a potential short-term rental when you’re not using it.
Key Things to Know Before You Buy
1. Financing Works Differently
A second property isn’t financed the same way as your primary home.
You’ll typically need a larger down payment (often 20% or more if it will be used as a rental)
Qualification is stricter as lenders look closely at your existing debt, income, and credit.
2. Rental Income Can Help (But Not Always Fully)
Some lenders will use a portion of your projected rental income to help you qualify. But they rarely use 100%—usually 50–80% of the expected rent is factored into your mortgage application.
3. Extra Costs Add Up
Second properties come with additional expenses:
Property taxes and insurance
Maintenance and repairs
Management fees if you’re renting
Travel costs for a vacation home
4. Risk vs. Reward
Market shifts, vacancies, or unexpected expenses can affect your returns. Real estate is powerful for wealth building, but it’s not without risk, so having a buffer matters.
Is a Second Property Right for You?
Investing in real estate can be a smart way to grow wealth, diversify income, and create long-term security. But it should align with your broader financial plan, not just the excitement of owning “more.”
This isn’t about chasing trends, it’s about clarity, stability, and strategy.
The Bottom Line
Whether you’re considering a rental, a vacation home, or your first investment property, the right mortgage strategy makes all the difference.
At Jewels Ferris Mortgages, we’ll walk you through the numbers, risks, and opportunities so you can make a confident decision that works for your life — not just the market.
