Purchasing a rental property

[Account Closed]

I currently rent in Toronto but planning to invest in a rental property out of the province. A friend told me that I need to own a home, or at least paying for one before I can be approved to get a rental property. Is this true? I don't plan to move out of Toronto anytime soon but I do want to start investing in a rental property to start building my wealth.

[Huong Luu]

@Account Closed, It may be time to get some new friends. ahah. All kidding aside, you don't ask your dentist for mechanical advice. You do not need to have your 1st property as your primary residency. Your 1st property can be a rental (investment property). If you do this, keep in mind, you will not be able to use your RRSP Home Buyers Plan and most likely you will not be able to use the 5% down payment first time buyer to your advantage unless you have a creative mortgage agent helping you. As you live in Toronto, where the market doesn't really allow for cashflow purchases, many new/young investors buy outside of Toronto where the $/door is lower. Another option for you may be to house hack in Toronto. Buy a house and rent out rooms/portions of it. This is usually recommended for people who are not sure if a long career in real estate is something they want. Good luck.