Real estate can be a sound part of a financial portfolio. If you are thinking of buying an investment property, your primary residence may be a good place to start looking for financing.
Housing values keep rising. According to the Canadian Real estate Association, the national average price for homes sold this October was up 5.8% year-over-year. Although sales in Toronto and Vancouver areas skew that figure, home prices were still up by 4.7% nationally, when these two markets are excluded.
For Financial Advisors, determining what role home ownership plays in the client’s overall portfolio – a residence ,an investment or both – is key. Residential real estate in Canada somehow missed the 30% price correction that occurred in the United States following the financial crisis of 2008-09. Prices have been on a steady upward trajectory in Canada.
One of the options to grow wealth via residential real estate is owning rental properties. According to a Senior Financial Advisor at Manulife Securities inc, buying a rental investment property, is a solid part of an investment portfolio as a substitute for real estate investment trusts. Looking at a house or townhouse near mass transit, in a big city, can be a reliable income.
Real estate is generally a great investment option. It can generate ongoing passive income and can be a good long-term investment if the value increases over time.
It is vital to be diligent before rushing into buying an investment property though. Do an extensive background research on the property, the market and potential tenants. Legal work to check for any issues relating to the property is also wise. If you are buying a house as an investment, be sure to get a home inspection.
Borrowing money or teaming up with other investors to purchase real estate can be a good idea. Keep in mind that if you invest using other people’s money and the market falls, you may end up owing more than your properties are worth.
Solid financial advice is critical when buying an investment property. Our mortgage brokers have a combined mortgage industry knowledge of over 26 years. Save yourself time, money and frustration by putting our years of experience to work for you.
Original article: www.theglobeandmail.com