Are you considering investing in real estate? Whether you flip houses, or own and rent a vacation home, family residence or commercial property, adding real estate into your investment portfolio can be an excellent choice!

Benefits of Investment Properties

You’re in control

With other types of investments, you generally can’t be hands-on, making the day-to-day decisions that can impact growth. But with real estate, you call the shots. You choose the area to invest in, which tenant you’ll rent to, how much you’ll charge and how you’ll rent. The choices you make directly impact how successful you’ll be (so be sure to do your homework).

It’s a passive income source

Once set up, an investment property can give you recurring income that requires little effort to maintain. This makes it an attractive option for people looking to make money on the side or as additional retirement income.

You have options

If things aren’t working out – you can always sell! Real estate investments offer flexibility. You can choose to move into the rental yourself, use it as a vacation home, or sell at the right time when it will be most profitable to you.

Real estate adds diversification

Adding real estate to your investments boosts your diversification, adding an extra layer of protection against economic turmoil. The more diversified your portfolio, the better your chances of even, steady growth that fares against the ups and downs of an everchanging market.

Property appreciation

Depending on the area you purchase and the type of rental property, your rental will appreciate over time. You can make an income while you own and rent the property, but you can also profit when you sell. The key is to invest in suitable properties that rise in value over time.

Tax advantages

You can deduct several expenses associated with owning an investment property. These include items like property taxes, mortgage interest, property management fees, insurance, ongoing maintenance, repairs, marketing expenses and more.  Also, when you sell an investment property, it is taxed as capital gains, which generally come with a lower rate than income tax.

You can leverage funds

When investing in real estate, you may not be able to afford the entire price upfront. Leverage means you can use other people’s money (in a mortgage or loan), so you don’t need to pay the total amount upfront.  Consider a joint venture with another investor or partner.

Protection against inflation

As the prices of goods and services rise, home values and rents typically increase. Investment properties can provide you with monthly income and appreciation when the costs of everything else go up as well.

Getting started with Real Estate Investments

Types of Real Estate Investments

• Residential real estate (townhouses, detached homes, multi-unit homes)
• Vacation properties or cottages
• Commercial real estate (apartment buildings, hotels, offices, retail spaces)
• REITs (real estate investment trusts) – like buying a stock, you invest in real estate owned by a company that pays you a dividend
• House flipping – purchase a home for a lower price (one that needs some TLC), update it, and then sell it for a higher price
• BRRR Method – Buy, renovate, rent, refinance

1. Determine your goals

What do you hope to achieve from your investment? Will this be a side hustle, or do you need to replace income? Is this a short-term investment or part of your retirement plan?

Set SMART (specific, measurable, attainable, relevant, and timed) goals that give you direction.

For example, “I want to earn at least $500 a month from my property rental within two years of purchasing a unit.”

2. Get a seasoned investor on your side

Jumping into real estate can be costly if you don’t do your homework. Look to the experts and learn from them! Someone with years of experience in real estate will have gained tips and tricks on navigating the market and can help set you up for success without the trial and error of being new.

Reach out to a seasoned investor and ask for help – getting a sneak peek at the realities before jumping in is invaluable.

3. Spend time learning the market

The current housing market plays a significant role in real estate investing – including where to purchase, what type of property to search for, and how quickly you can expect to be profitable.

Spend time researching trends and expected changes within the housing market, looking to people who have extensive knowledge in the industry and area you are interested in.

4. Learn how to run the numbers

Cash flow analysis or Pro-forma is a must before purchasing an investment property. You want to know your numbers inside and out! Want to see the cashflow analysis we use on every property we assess? Send us an email and we’d be happy to send you a copy of our template.

Purchasing an investment property can be an overwhelming task, especially if you are concerned about how it will impact your current financial situation. Get a pro on your side to give you a snapshot of your finances to see if your investment dreams can become a reality.   

5. Choose the type of investment you’ll purchase

Look back to your goals to determine what type of property you’ll purchase. Are you looking for a vacation rental your family can use for part of the year? A residential property you’ll retire to in the future. Or a commercial property, possibly with multiple units?

6. Define your target market

Once you know the type of property you want to purchase, get an idea in your mind of what kind of tenant you’d like to attract. All of this will play a role in which amenities (such as offices, shopping, neighbourhood) you search for.

7. Choose your location and property

Location plays a significant role in purchasing a rental property in terms of the sale price, the types of tenants you’ll attract, how much you can charge for rent and how much you stand to make when you sell. When choosing your property, keep in mind:

• Walking score, community amenities, feel of the neighbourhood, proximity to schools and what employers are in the area
• Will you choose close to home or invest in a different place?

Investing in real estate can be a rewarding and exciting venture and an excellent way to diversify your portfolio, add an additional income source, and help set yourself up for a wonderful retirement!

We’ve been successfully investing in real estate for years and have extensive knowledge on the topic. We’re happy to answer any questions you may have.