‘90% of all millionaires became so through owning real estate’ – Andrew Carnegie
Indeed, investing in real estate is one of the best ways to build wealth. Recent statistics show that the Canadian housing market performed well in the past year, despite the coronavirus pandemic. Home prices in Canada’s eleven major cities increased by 9.36% in 2020, the highest growth since 2016. With the current demand for property, you might want to consider real estate investing in 2021.
Here are some reasons why investing in real estate is a good idea:
Passive income
When you buy an investment property and rent it out, you earn passive income every month. Passive income means making money without being actively involved. Although rental properties are not 100% passive income, they do not require as much time invested as a full-time job. Rental properties can therefore be a very reliable source of income, especially in retirement
Appreciation
Real estate usually goes up in value over time. The land on which property is built also becomes more valuable in the long term. As an investor, you could also choose to increase the value of your property by adding amenities or features. This is referred to as forced appreciation
Equity
As you pay off your mortgage, you build more equity in your investment property. In addition, the equity increases as the home’s value appreciates over time. Later, you could take a home equity loan to pay for home renovations, college for kids, medical emergencies or even to buy a second rental property
Tax benefits
Owners of real estate are allowed to deduct expenses associated with an investment property. This includes property insurance, mortgage interest, property tax, repair and maintenance costs, property management fees, advertising costs, and legal fees
Portfolio diversification
To mitigate your risks, it’s not advisable to put all your eggs in one basket. You can diversify your portfolio by investing in different types of real estate and in different
locations
Hedge against inflation
Rent and the price of homes usually increase in direct proportion to inflation. This makes real estate the perfect hedge against inflation
Conclusion
Choosing the right real estate investment strategy can be tricky, especially for beginner investors. This is why you need a professional to help you put together a strategy. Book a consultation today so that you can start investing in real estate while the market is so hot: https://www.regalwayhomes.com/book-online