Real Estate Strategies - Important Things to Consider When Changing Your Plans in 2023
When you are planning your investments, it is natural that sometimes you may want to change your mind about certain real estate strategies in favour of one you think will better suit your goals as an investor. However, the path forward is not always clear.
So, how should you go about changing your real estate strategies for an investment property?
Well, the truth of the matter is that the best method to go about shifting gears in favour of a new strategy will vary depending on the specifics of the property and the strategies you are changing between. However, if you are looking for guidelines and advice to begin structuring your approach, you are in the right place.
Of course, different real estate strategies require different financing, so if you are interested in securing the best finances for your investment, click the link below to book a free strategy call today.
Understanding Multiple Real Estate Strategies
Real estate is not a one-size-fits-all type of investment. Instead, it is an industry full of countless unique takes on investing in different properties. However, one of the most commonly discussed real estate strategies for investing is the act of buying and operating rental properties.
Of course, even through doing this there are multiple real estate strategies you can take such as renting your properties out for someone to live in long-term, offering your property as a short-term rental, or offering rooms on the property as student rental housing. Each of these strategies have their own unique approaches that will impact what may happen if you later wind up changing your mind.
Converting a Long-Term Rental Into a Short-Term Rental
One thing that you may be interested in trying out as a real estate investor when you are assessing real estate strategies is short-term rental investing. While typically investors will buy a property to attempt this strategy, it is usually possible to do so with properties you already own.
Converting Vacant Properties
If you have a vacant property, it can be incredibly simple to convert the property into a short-term rental despite its prior use as a long-term rental. In fact, as long as you meet any licensing requirements and operating restrictions that are present where the property is located, you can freely begin stocking and listing the property as a short-term rental.
Converting Occupied Properties
The complication comes when you want to convert a property that is currently tenanted as a long-term rental into a short-term rental. When a property is currently tenanted you are not permitted to evict the current tenant in order to start using the property as an Airbnb in Canada. These restrictions are in place to protect the housing supply and prevent people from being displaced from their homes in favour of short-term rentals.
However, just because you cannot evict them or force them to leave it does not mean that you cannot convert the property to a short-term rental. Instead, what you are capable of doing in order to make the switch is you can talk to the tenant and offer them incentives to willingly terminate their own tenancy. If they say no, then you will have to look elsewhere, but if they agree to terminate their own tenancy you will then be free to use the property as a short-term rental.
Alternatively, if you only want to offer part of the property as a short-term rental, it may be possible in some places to offer the tenant a lease amendment to gain the rights to use part of the property as a short-term rental while they continue living there. However, they are fully within their rights as tenants to refuse the amendment and continue on with their existing lease agreement instead.
Discover How To Rent A Property With This Step By Step Guide
Converting Short-Term Rentals Into Long-Term Rentals
When you are shifting real estate strategies, there is strong potential between shifting from short-term to long-term rentals.
Unlike converting a long-term rental into a short-term rental, changing a short-term rental property into a long-term investment is an incredibly simple process. Since the property is not consistently tenanted, you are free to simply remove your listing as a short-term rental and get straight to work setting the property up for full-time tenants. Provided your photos of the property from the short-term listing are attractive and up to date, you can even use those photos for your rental listing straight away.
Sometimes you may wish to take furniture and supplies you kept on site out of the property so that you can use them elsewhere. However, you may choose to keep them there to offer the property as a furnished rental in order to offer tenants additional value.
Converting Rental Properties Into Student Housing
If you are planning to convert a property into student housing it is best to start with a vacant property. After all, amending leases in order to accommodate multiple additional tenants in the space can be messy and difficult to navigate. Otherwise, it is no different than setting up any other student rental property using different real estate strategies.
Should You Convert a Property? Or Simply Buy a New One?
While it can often be possible to convert a property from one use to another, it is often considered much easier to buy a new property to accommodate your new strategy, especially if your properties are currently in use and producing cash flow. After all, you typically do not want to disrupt your existing cash flow on new real estate strategies that is not guaranteed to succeed. However, if you do not have the funds available to buy a new property and it is possible to make the conversion with minimal hassle, you are certainly capable of doing so.
If You Are Changing the Use of a Property – Talk to Your Lender
Certain mortgage lenders do not lend against certain types of properties for a variety of reasons. So, any time you go to change the purpose of a property you are buying, it is important that you take the time to talk to your mortgage lender to ensure that your mortgage will not be affected by the changes to your real estate strategies.
To make that process even simpler, let our team at LendCity do it for you. Our agents are well versed in navigating lender requirements and conditions and will strive to get you the best outcome every single time.
To book a consultation or get started today, visit us at LendCity.ca or call our office at 519-960-0370. Alternatively, click the link below for a free strategy call to begin pursuing financing regardless of which real estate strategies you plan to use.