Ep 37: Should I Buy in This Market and Other Frequently Asked Questions

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Show Summary:

Scott Dillingham, the host of the Wisdom Lifestyle Money Show, addresses some frequently asked questions about the current real estate market. He believes it is a good time to buy properties despite higher interest rates. The market has cooled down, with fewer bidding wars and some properties being sold below the asking price. Rental prices have remained stable or even increased in some areas, offsetting the impact of higher interest rates on cash flow.

Dillingham predicts that the cooling in housing prices is temporary due to a shortage of housing supply in Canada. Once the economy returns to normal and the effects of COVID-19 subside, he expects prices to recover quickly. While interest rates have recently risen, Dillingham believes they will eventually settle down and follow the trend of inflation. He advises investors to consider their preference for fixed or variable rates, noting that the variable rate allows for a higher purchase amount and provides flexibility for future investments.

To maximize purchase prices, Dillingham suggests two strategies. First, opting for a variable rate mortgage, as it has a lower stress test compared to a five-year fixed rate. This allows borrowers to qualify for a larger mortgage. Second, choosing the right lender is crucial. Some lenders consider a higher percentage of rental income for qualification purposes, enabling borrowers to increase their purchase price. Dillingham recommends working with a broker who specializes in investment properties and has access to a wide range of lenders.

Dillingham concludes by encouraging listeners to reach out to Lend City, his recommended lending company specializing in investment properties, for assistance in growing their real estate portfolios.