Definition
An investment property is a building acquired primarily to generate rental income and/or capital appreciation, not to live in as a primary residence.
**Down payment criteria**: - 1-4 units, not owner-occupied: minimum 20% (not insurable by CMHC) - 1-4 units, owner-occupied ('house hacking'): 5% if ≤2 units, 10% if 3-4 units → CMHC insurance possible - 5+ units: commercial financing (20%+), CMHC enhanced residential program possible
**Rental income in qualification**: - CMHC/Sagen: 50% of gross rental income added to qualifying income (offset method) - Institutional A lenders: some use 80% of gross income - Income must be documented (signed lease or market income from an appraiser)
**Rate**: Generally slightly higher for investment properties not owner-occupied (+0.10 to +0.50% depending on lender).
**'House hacking' strategy**: Buy a multiplex (2-4 units), live in one unit → access to reduced down payment and rental offset income → optimal wealth accumulation strategy for first-time buyers.