Is investing in real estate in Canada a good idea?

Monday Feb 03rd, 2020


One thing to note is that making an investment requires ample research and a little bit of luck. Real estate is an investment option that has been there for the longest time. The question that lays in people’s minds is if this investment option will still be viable in the end. The government of Canada recently shed light on the housing market state in the country and there could be no better time to discuss about this investment choice.

There is one thing that people should note and this is the fact that every investment can be a good one with great returns if it is exploited well. This is why you should find ways to use real estate to earn great returns on your investment.

Mitigate the risks

Like any other investment, real estate comes with its own share of risks. If you are taking mortgages and loans to purchase the properties, ensure that you have a record of these and analyze the changes in your debt ratio regularly. Make sure that you also seek financial advice from an expert before signing on new loans and mortgages. It is also essential to have an insurance policy that will cover your property in case of destructive occurrences like fires, storms, etc. For your property to sell, you will have to carry out regular repairs and maintenance. This however does not mean that these repairs and maintenance have to be costly. You can have a fund in place to cater for these costs. This will ensure that you do not have to dig into your rental income and mess up your budgeting and mortgage payments.

Real estate is like any other business

When investing in a business, you evaluate the viability of the business by evaluating the cashflows, both future and present. In real estate, most people evaluate the potential success of the investment by comparing the present buying price and the potential future price at that they will sell the property. This is a mistake as the only way that you will get high returns on your real estate investment is if the cashflows are high from the rental income. To achieve this, you have to consider the location of your property before investing. Getting a good location with a high flow of tenants will ensure that your property does not have a low season where tenants will not come around. It will ensure that you are also able to pay your mortgage comfortably and other loans you acquired to purchase the property.

Final verdict

Even though there is a looming possibility of a global recession in the real estate sector, real estate remains one of the best investment options. The CREA forecasted that the activities in this sector would increase by 7.5% in 2020. As an investor, you have the task of ensuring that you perform extensive research to influence a growth trend of your investment. The future is bright for the real estate sector in Canada because of the growth in population and the national housing decisions that are being put forward by the government.

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