Investing in the Canadian real estate market is one of the best ways to make money and build wealth. Despite the coronavirus pandemic, home prices have been on an upward trend in most cities in Canada. According to a recent housing market report, average home prices in Ontario went up by 26.1% year-over-year in September 2021. Experts predict that the prices will continue rising in 2022 and beyond.
So, how much will a beginner investor make? We hear this question frequently from Canadians who want to venture into the real estate business. According to some estimates, a real estate investor can earn between $70,000 and $125,000 per year. However, your income can vary greatly depending on a wide range of factors. Let's take a deeper dive into the topic.
There are numerous ways to invest in real estate. You can fix-and-flip properties, become a real estate wholesaler, invest in rental properties, house hack, invest in REITs, explore BRRRR investing or buy-and-hold properties. As a first-time investor, it's best to work with experts that can help you choose your investment strategy based on your income goals, level of expertise and available time.
Type of real estate investment
Investment properties can be divided into three major categories:
This refers to any investment property used for housing. Residential real estate includes apartments, condos, single-family homes, townhomes, multi family homes or vacation houses.
This refers to investment property whose main purpose is to host business services and operations. This includes hospitals, hotels, stores, warehouses and office buildings.
This kind of property can be used for both residential and commercial purposes. For example, a building could have retail shops on the lower floor, while the upper floors house residential units.
Whether you choose to invest in The Glebe, Hintonburg, Westboro, ByWard Market, Kanat, or any other neighbourhood in Ottawa, your decision will significantly impact your income levels. To enhance your chances of generating a high return on investment (ROI), be sure to invest in areas with a high job growth rate. When more jobs are being created, there will be a higher demand for housing. You might also want to consider towns experiencing gentrification.
Real estate laws
Every jurisdiction has laws that govern the housing market. While some laws are conducive for real estate investment, others are too prohibitive. Before investing in real estate, be sure to get familiar with all the real estate laws of the area.
Investing in real estate can be very overwhelming, especially for beginner investors. If you are not sure how to get started, get in touch with us.