Investing in Real Estate

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Real estate investing refers to the purchase of property as an investment to generate profit. When we think about investing in real estate, the first aspect that arrives in mind is most likely owning our primary residence with the hope that its value will increase over time. Purchasing your own home is a major financial accomplishment and has a number of benefits but there are so many other ways to invest in real estate today, including options for all budget levels.

I am referring here some of the possible ways by which you can invest in Canadian real estate.

Owning a residence

Buying a home is a long term investment. Instead of paying rent to your landlord, you are increasing your net worth by paying your own mortgage. While purchasing a primary residence, location and amenities available are the main indicators that must be taken care of.

You can also rent  out a portion of the home,  like a room or basement for some extra cash.

The average price in Canada is currently $480,743, an amount that changes from region to region of course.

Invest in rental properties

One might consider investing in rental properties. It is a great starting point for real estate investors. Buy a property and rent it out, enjoying the monthly cash flow while waiting for appreciation. There are short term rentals like vacation rentals and long term ones like one to three years lease. You can manage the property yourself or you can hire a property management company for handling your rental property.

House flipping

It is a type of real estate investment strategy in which an investor purchases an old property, fixes it quickly with the intention of selling it for profit. Flipping houses is also a business which requires lots of knowledge, skills, patience, time and planning. It took an average time of 4-6 months to flip a house. In case you are considering it as an option then do consider all the risks involved in house flipping. For a successful house flip, do look for houses that require minor fixings and smaller renovations.

Real estate investment trust (REITs)

It is a company that owns and in most cases operates income-earning real estate. REITs own many types of commercial real estate, ranging from office and apartment buildings to warehouses, hospitals, shopping centre, hotels and commercial forests. Purchase a REIT and enjoying the relatively high pay-outs and potential stock appreciation. Real estate investment trusts save you the cost, work and risk of owning investment property yourself. If you’re interested in real estate investing in Canada through a REIT, you should look into the RioCan, Canada’s largest real estate investment trust.

There are so many benefits of investing in real estate. If done wisely, it may generate lucrative returns. This investment is not affected by inflation. It is the most significant source of generating passive income. Moreover, the investor is free to make his/her own decisions. One can get tax benefits, value appreciation and financial security in this sort of investment.

So, we can say that Investing in real estate is a long term approach and yields high profit in future at a low-risk level. These investment decisions are irreversible. One needs to make decisions after having full knowledge so that any kind of risks can be avoided.

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One thought on “Investing in Real Estate”

  • Amit

    Very Good Article!


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