(NC)—A mid-year report by RBC reveals that most homes in Ontario are still generally affordable, but they may not stay that way. If you're considering a real estate investment because of the favourable market, planning and anticipating potential risks that could affect your cash flow are also key.

Barbara Sukkau, president of the Ontario Real Estate Association says that there are a number of important things that potential investors must consider, including how much they can afford, how involved they will be in the project, and what they are looking to get back.

“To begin, a buyer should figure out where to invest,” Sukkau said. “The demographics of the neighbourhood—for example, is there a majority of student renters in the area, or is it predominantly family owners—may determine whether you invest in a condo, duplex or detached home. Whether you plan to rent to a family or young students may also affect your plans to renovate.”

The purpose or use of the home will impact the required down payment. If you plan to live in the property—either as a tenant in one of the units or as the primary resident while it's being renovated—a down payment of at least five to ten per cent will be required. If investing in a non-owner occupied property, at least a 20 per cent down payment will be required.

“Balancing your time commitment with your available finances could mean monthly rent from tenants to pay off the mortgage or purchasing a fixer-upper to renovate and re-sell,” added Sukkau.

Without a plan to deal with the ongoing maintenance of the property or to fund a project beyond the down payment, real estate investments can take a turn for the worse. A Realtor can provide advice throughout the process and on the many decisions to be made along the way.

To learn more about home buying or to find a Realtor in your area, visit howrealtorshelp.ca.

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