If you are a non-resident hoping to buy a property in Toronto, Canada, chances are you have some questions in mind that you’d like to get answered. We’ll clear out some clouds of confusion about a home purchase in Canada for non-residents. Here’s what you need to know:

General Rulings for Real Estate Buyers

As a general rule, Canada welcomes home buyers from different parts of the world. This means that there is no restriction as to who can buy a property in Canada. If you are a non-resident and are interested in buying a house, then you can do so by all means.

• Impact at Immigration – You may have the notion that once you buy a property in Canada, then you have a bigger chance of being approved at the immigration. Please be advised, however, that owning a property in Canada isn’t one of the factors determining your approval. Be aware that immigrating to Canada is a complex process and entails many selection considerations.

• Canadian Resident Living Outside the Country – If you are a Canadian resident who has been living out of the country for more than half a year, it’s essential to know your status in the eyes of the government and financial institutions. You are still considered as a resident by the government for the purposes of the non-resident speculation tax. For financial institutions or banks, however, you are no longer considered a resident, and so the same banking rules for non-residents apply.

• Non-resident Wanting to Buy a Property – In terms of treatment, banks will treat you as a non-resident. As a non-resident home buyer, you are subject to the same requirements, including a higher downpayment. Also, you are not generally subject to the Non-Resident Speculation Tax if you have a spouse who is a permanent Canadian resident.

Mortgage for Non-resident Buyers

As a non-resident buyer, you are entitled to get a mortgage to purchase a house in Canada. Typically, non-residents have a minimum of 35 percent down payment with a maximum of 65 percent of the home’s value provided as a mortgage. However, it’s worthy to note that banks have different rules for home buyers. It’s best to visit each bank or lender and learn its mortgage terms and agreements.

• Eligibility and Qualifications – The general requirements for non-residents in buying a property in Canada include the following: 35% downpayment, a reference letter from the bank, an employment letter verifying income, three-month bank statements, and Canadian credit check.

• Interest Rates – In general, non-residents have the same interest rates as Canadians, provided they meet the mortgage eligibility criteria. Please be advised, however, you will only be eligible for a fixed-rate interest rate if you live in a country that does not have a tax treaty with Canada.

Renting Out Property

It’s possible that you may come up with the decision to rent out your property once you have successfully purchased it. Renting out entails setting a price, marketing the property, showing it to potential tenants, screening them, negotiating a lease, and securing a deposit. When doing so, you have to take note of two important things – finding the right tenant and managing the property.

• Finding Tenants – Some real estate companies help in finding tenants for property owners. The process involves pricing, marketing, screening, and negotiating. If you opt to find a tenant for your property, then you may seek their services.

• Property Management – Some third-party vendors can go as far as managing the properties for their clients. These include finding the tenant and maintaining the property in the long run. You may want to take advantage of their services.

• Return on Investment – As a return of investment, some clients are concerned with cash flow,  the appreciation in the value of the property, and building equity in the property. When renting out your property and dealing with a third party for your property management, you have to assess what your goal is, as mentioned above.