Property investments have had excellent returns in the past few years and it appears that this trend will continue. Current historically low interest rates and record-breaking sales have contributed to these exceptional returns. A strategic real estate portfolio includes a collection of diverse investments to help you achieve your individual goals. Whether you use your property to generate rental income or to wait until the ideal selling opportunity arises, it’s possible to build a robust investment program by paying a relatively small part of a property’s value upfront.
Many types of real estate investments provide income that can be utilized to pay down the mortgage that was used to purchase the property. Like any type of investment, risk and reward often go together. Expanding your portfolio can help diversify risk, generate income and grow long-term wealth. Here are five great ways our highly knowledgeable advisors can help you invest in real estate and build a successful portfolio.
Investing In A Principal Residence & Adding Rental Income:
Investing in a principal residence is the most popular method as it allows you to live in your home while paying off the mortgage and building equity. Rather than helping to pay a landlord’s mortgage, you are paying down your own and growing your personal wealth – all within the comforts of your own home.
Renovating a basement into a suite, building a laneway home or renting out a spare bedroom are excellent ways to generate valuable extra income. To avoid potentially expensive unforeseen costs, ensure that your accommodation meets the municipal bylaws, codes and property strata regulations.
Buying A Rental Property:
Buying a residential or commercial rental property is another popular method to generate income and expand your real estate portfolio. The return potential is strong as you can use leverage to purchase the property and then earn revenue from the rent, which can fully or partially offset your mortgage. It also increases your equity as the property values rise. Our advisors can help you find profitable real estate investments in up-and-coming neighbourhoods with new infrastructures such as skytrain lines, hospitals and educational facilities.
It’s important to consider that most lenders require a significant percentage down for the loan, so it can be expensive to buy your first rental property. Also, it’s wise to save several months’ worth of expenses to cover repairs and tenant vacancies.
Purchasing Luxury Real Estate:
Luxury real estate promises very good returns in the long run as it tends to have steeper price gains than other properties. A luxury home is also typically a better investment than regular real estate or the stock market as it is a tangible asset that provides exclusive lifestyle opportunities. Now is an excellent time to purchase luxury real estate as it’s pandemic-proof due to its location and amenities. Many luxury homes are situated within communities that feature their own world-class golf courses, private beaches and fashionable shopping areas.
Luxury homes can fluctuate in value, but they remain in demand during difficult economic times. This is because they surpass the cost of replacement and fulfill a very specific demand in the real estate market. Investing in luxury real estate can involve building from the ground up or renovating using the latest designs, materials and technologies. You can also rent out your luxury home when you’re not using it to generate a healthy income.
Buying, Fixing And Flipping:
This method of real estate investment involves purchasing a property that has significant potential to increase in value once it has been renovated. House flipping requires capital and the ability to do, or oversee, the necessary repairs. Therefore, it’s best suited for investors with extensive experience in real estate valuation, marketing and renovation. It’s also important to have knowledge of renovation costs and budgets or your expenses can increase tremendously.
Investing In Real Estate Stocks Or Reits:
Real Estate Investment Trusts (REITs) are a profitable hands-off, hassle-free way of investing in the market. REITs are basically dividend-paying stocks that can own a large portfolio of commercial and residential real estate such as hotels, offices, retail centers – and even medical facilities. Many REITs trade on stock exchanges, allowing you to buy them easily with minimum capital.
The best real estate investment decisions are the ones that meet your personal goals. Our highly experienced advisors listen carefully to your investment objectives and tolerance for risk. We understand the complexities of both local and global real estate markets and how to build a successful, strategic real estate portfolio.
Last month’s sales in Metro Vancouver were 13.3 % above the 10-year July sales average and up 6.3% from July 2020. Now is a perfect time to invest. Consider how much time you have, how much capital you are willing to invest and whether you want to be the one to deal with household repairs when they inevitably arise. A successful investor is an empowered investor. We invite you to call us today so we can help expand your real estate portfolio together. 604.913.1000