Is Real Estate a Good Investment in Canada?

Right now, the Canadian housing market is hot. Property owners are all too aware of the rapid appreciation in the value of their homes. For this reason, investors interested in Canadian real estate need to jump on the train before it leaves the station. After all, the stock market isn’t the only place to make money.

If you want to expand your investment portfolio soon to include real estate, it’s imperative that you browse our Calgary homes for sale and then get in touch with us for the kind of personalized service that can help you reap the benefits. Our Calgary House Finder, it’s our mission to help you find a new home or an investment property quickly and easily. 

Make the Right Real Estate Investment For You

So far, 2021 is the best year in recent memory for investing in real estate properties in Canada. And while we’re still in a pandemic, homebuyers and real estate investors can find single-family homes with low-interest rates with little difficulty. 

Purchasing a principal residence is not just a great investment because home prices are rising. After a few years of living in it, you’ll have time to increase your ROI by making some key improvements to your home, such as renovating the kitchen, re-doing the roof or finishing the basement.

Aside from a principal residence, there are a wide variety of other real estate investments you can make. So whether you’re buying your first home, are interested in land, or want an investment property to build long-term wealth using the rental income provided by your tenants, then Calgary House Finder is for you. Their team of real estate agents have their finger on the pulse of the housing market. Our experts can help you make a sound investment decision.

What Happens When Making a Real Estate Investment in Canada

When investing in real estate, it’s always a good idea to start  with a principal residence. In fact, investing in real estate is considered a vital part of financial planning in Canada. According to the Canadian Revenue Agency (CRA), a taxpayer doesn’t need to pay capital gains taxes on profits earned by selling their principal residence. 

Selling a capital asset, such as property, at a higher value than it had when you purchased it turns the profit into a capital gain. The taxpayer can use this tax exemption to reduce or eliminate other taxable capital gains related to the selling of the principal residence.

If you’ve been looking for a home in Calgary, there are a number of prime neighbourhoods that are totally worth a look. The houses for sale in Auburn Bay could help you turn a profit, and you could try your luck searching through the various houses for sale in Mahogany. And those are just two of the neighborhoods to choose from. 

The point is, if you do invest in real estate in Canada, you need to remember that this tax exemption does not apply to all properties, solely for a principal residence. About half of the profit you earn from the sale of any other property will be subject to the capital gains tax.

Types of Real Estate Opportunities

There are two types of real estate investments: active and passive. The Calgary House Finder experts have outlined some options that a savvy real estate investor in Canada should consider.

RESIDENTIAL RENTAL INCOME

Real estate investing in Canada also includes the purchase of residential property to rent out. This is a viable investment opportunity where you can earn a monthly income from tenants. This additional cash flow can go towards a variety of expenses, including mortgage payments. 

And what’s better, if your residential rental property has a lucrative cash flow, you can use the left-over rental income to hire a property manager, freeing you up to live your life while still building wealth! To invest in Canadian real estate is one way of creating other streams of income, and residential rental properties could be the right move for you. 

HOUSE FLIPPING

If you’re an avid watcher of HGTV, you’ve likely seen dozens of house-flipping shows. They make real estate investing in Canada look fun, and can provide you with significant profits when done right. However, this line of business is often filled with surprises and setbacks.

If you’re not familiar with this concept, house flipping consists of someone buying a property—often a house—and renovating it. Sometimes, the property is gutted while, in other instances, only certain rooms get a makeover. All of this work is done to increase the home’s value. Professionals who know what buyers want and how the housing market works can spot properties with significant potential that will increase in value once they have been renovated.

Bear in mind that house flipping is done within a short period, usually in a few months so that the flippers can sell it for a profit. It’s not as straightforward as many think. Opening up the interior of houses can lead to finding many problems that are costly to fix. And you may not be able to sell as quickly as you expected. 

However, if you’re up to the challenge, we recommend speaking with our real estate agents to get a better idea of the Calgary rest estate market. You’ll need to know details, such as home prices in the neighbourhoods you’re going to target, sales trends, and the costs of renovations, just to name a few.

REIT/ETFS

If brick-and-mortar real estate investing isn’t what you’re looking for, investing in a real estate investment trust (REIT) is a passive option to consider. A REIT is a company that owns, operates, or finances commercial properties. The company invests in most property types and is publicly traded, much like stocks. Investors can purchase shares of commercial real estate in this highly liquid type of investment. 

But it’s also possible to choose a REIT’s exchange-traded funds (ETF) instead to save you the headache of choosing which single REIT to invest in. An ETF lets you enjoy a diversified portfolio of REITs that will reduce your risk of losses. If one REIT declines on the stock market, it won’t hurt your investment portfolio as badly since you will have shares from various REITs.

If you’re interested in this type of real estate investing in Canada, speak with your financial advisor.

What is the Best Investment in Canada?

The best investment to make in Canada is in your future. One of the most low-risk moves investors make is to put their money into a guaranteed investment certificate (GIC). This allows them to save their money for a certain amount of time, and once withdrawn, they benefit from the principal amount plus any accumulated interest. This is just one kind of low-risk investment that Canadians can use toward a down payment on a property or a mortgage payment. 

For more information on investments and how you can use them to make more money real estate investing, get in touch with us and we’ll be glad to chat.

Dive into Real Estate Investing with Calgary House Finder

There is a whole world to discover in real estate investing, but you need a seasoned professional to help you make intelligent and profitable decisions. Teaming up with Calgary House Finder is the first step towards a lucrative real estate investment. 

Depending on your situation and plans, we can help you find investment properties with low mortgage rates and taxes. No matter what type of real estate investment property you have in mind, reach out to someone you can trust to help. Call us at Calgary House Finder, and we’ll combine your preferences and our expertise to locate a good match.