Investment properties are now accessible to many average Canadians.

Across the country, ordinary Canadians are building personal wealth with investment property. The market is clearly there. In fact, the investment property market continues to be strong in most markets in Canada, with a steady supply of renters for residential, commercial and retail properties.

There are several financial options that you can take to achieve this goal:

  • You may want to use the equity in your principal residence to finance your investment purchase,
  • Or you may opt to take out a second mortgage on your principal home.,
  • Or you could simply finance the vacation property on its own merits.

Why Consider an Investment properties?

Investment properties, particularly smaller, residential real estate – are now much more accessible to the average Canadians. And as any homeowner will confirm, real estate has been one of the most attractive investment categories in Canada for the past decade. If you're considering an investment in real estate, start by having a conversation with an experienced mortgage broker, to explore some of the innovative new options and great rates available today.

Return on investment

Certainly, residential real estate is a solid long-term investment, typically appreciating faster than inflation. Even Canadians who have chosen their stock portfolio very carefully may find that their home is their best-performing investment. Many investment advisors recommend diversifying stock and bond portfolios to include real estate. Initially the goal is to have rental income cover all or most of the costs of the property. Over time the goal is to see an increase in the value of the real estate, with rent turning to profit once the mortgage is paid off. Expenses related to the property are of course tax deductible, offsetting the rental income.

A pension plan for the future

Over the long term, an investment property or multiple real estate holdings can be a great source of retirement funds. Many Canadians do not have a pension plan, which means they need to take their own action to create sources of retirement income. Fewer than 50% of paid workers have employer-sponsored retirement plans, likely one of the reasons why almost 40% of retired Canadians lack sufficient savings to maintain the lifestyle they had envisioned for their retirement years. Over the long term, an investment property can be a great source of retirement funds. Rental income typically pays for most or all expenses and property appreciation has often outperformed the stocks and bonds over the long term.

A better alternative to student residence

Many Canadians are shipping off their university-age children, and housing them in an investment property purchased specifically for that purpose.  Parents who add up the cost of accommodations for their college-bound children are often deciding to be landlords themselves - since they know at least one of the tenants very well, and they see an opportunity to offset the cost of housing with a sound investment.They can save money on out-of-town accommodations for the student and use revenue from other renting students to pay the mortgage and maintenance expenses.

A chance to improve a diamond-in-the-rough

Homeowners who have developed some home-improvement skills have a great opportunity to use their time and talents to dramatically increase the value of a home. Most handy homeowners are comfortable with painting, papering, refinishing and basic landscaping. If you’ll need professional skills to spruce up your investment property, be sure to budget for them.

Earlier access to a first home

This is not just an investment for well-established business people and experienced homebuyers. Savvy first-time buyers are often jumping in with both feet: purchasing a duplex or triplex, and then managing the additional units to pay down the mortgage while they make a start on home ownership. For first-time home – buyers, a duplex or triplex can be a terrific way to get onto the home ownership ladder. Rental income from the extra units can help offset the cost of the mortgage as the new homeowners get on their financial feet.

There are many reasons to consider investing in property. If you are thinking about building wealth with an investment property, talk to me. I can help you determine your down payment options and run the financial calculations that you'll want to see for cashflow and capital appreciation.

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