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The global financial crisis has caused a significant decline in almost all industries. However, if you’re in Canada and your interest lies in real estate, then you’re in luck. The diversity of Canada’s regional economies has reasonably protected its real estate market from the financial crisis. As long as you know where to invest, you’ll realize that real estate investment is still very lucrative in Canada. Of course, you need to realize as well that real estate investment involves a lot more than buying and selling properties. There are a bevy of critical aspects you should consider, among them home insurance and inspection. Furthermore, the fact that real estate has a huge potential for gains doesn’t mean there are no risks involved. In fact, there are a lot of risks, which is why you really need to know exactly what you’re getting into.
Renting out property is one of the oldest practices in real estate. The best advice in this case is for you to charge just enough to cover property maintenance costs, including taxes, home insurance, and mortgage. When mortgage is finally paid, you can start counting most of the monthly rental as profit. This takes time and patience, but it may be well worth it.
For some people, being a landlord is just too much to handle. In this case, you may want to consider being part of a real estate investment group. With this setup, you get to buy one or more units in properties such as apartment units. The company that bought the property is responsible for managing it and taking care of expenses such as home insurance, inspection, taxes, and mortgage. They will then take a certain percentage of the rental charge. You get to profit without dealing with the hassles of being a landlord.
Another breed of real estate investors is known as traders. What they do is purchase property, hold it for about three or four months, and then sell it for a good profit. The practice is also known as flipping, as it involves buying the property at a very low price and then selling it for a much higher one. Bear in mind, though, that this strategy works best for those who have excellent renovation skills.
Real estate investment trusts (REITs) may also be worth considering. Many people appreciate the hassle-free nature of REITs. Among other things, you don’t have to worry about mortgages, taxes, and home insurance. Practically all you need to do is buy shares in a real estate company. You get to own shares in such properties as commercial complexes, malls, or hotels and profit from these properties without the hassles of actually managing them.
These are just some of the options available to you if you’ve decided to invest in real estate. You may want to start out by investing in such areas as Barrie (Ontario), Surrey (British Columbia), and Red Deer (Alberta). These are identified as the best places to invest in real estate in Canada. You may also want to get guidance from a professional at the outset. Once you become familiar with the whole real estate investment setup, the things that cause the most concern in the beginning like home insurance will soon become just minor issues.
Helen Prasad is the Co-Founder/Business Development Manager at Ratehouse.ca. In her opinion, great investment advice can play an important factor in our everyday stressful lives, so people need to be more aware and detail-oriented. You can stay in touch with her on Twitter as well.