How to Afford Rental Property Renovations

Nelda Schulte
3 min readAug 25, 2021

Are you wondering how to afford rental property renovations?

Suppose you found an almost perfect rental property that you could make perfect with an additional $20 — $30K. The only problem is that you don’t have another 30K lying around. What can you do?

Consider this gem from Ken Kirkpatrick of Wise Mortgage. It could save you thousands of dollars and cut back on the amount of time you’d spend finding ways to cough up an extra 20–30K in renovation costs.

Ken shared this brilliant yet unknown mortgage tip that includes home improvement funds — it’s called a purchase plus improvement mortgage.

This mortgage allows you to have that garage or deck built or to develop the basement suite as part of your mortgage funds.

Purchase plus improvement mortgage

How does it work?

Let’s say you buy the house for an agreed price of $ 380,000. You may get the mortgage approved for that purchase price plus an additional $ 20,000 in improvements, for a total of $ 400,000.

100% of the funds are advanced at closing to the lawyer, who holds funds in trust for you until the necessary rental property renovations are completed. Once inspected, the lender authorizes the advance. You will then make mortgage payments as if the full amount has been advanced.

For CMHC, it is the lesser of 10% of the purchase price of $60,000 (which is great for higher-priced houses).

By withdrawing money that was already paid into your home loan, the home improvement loan allows you to finance your renovation for the same terms as your home loan.

Credit card

Have you ever received an offer for a zero percent interest credit card for a specific time, say eight or 12 months? If you only use it for rental property renovations and make monthly payments towards a goal of zero balance by the end of the offer, it’s a great way to borrow money on the cheap.

Line of credit

My Dad got an unsecured line of credit to use as bridge financing when his new home was being built. He was thrilled that he could write a cheque for 20K — just like that…

Nelda Schulte

Nelda Schulte is a freelance writer based in Calgary, Alberta, Canada who specializes in real estate.