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If you’re looking to create income other than your typical job or if you’re just looking to invest for the future, real estate investment might be the path for you to take. This decision can be extremely lucrative for you and your family and provide you with stable income now as well as when you might need it in the future. Consider some of the positives about investing in real estate, and then make the plunge when you have the information to get started.
It is low-risk
While investments such as bonds can be risky and may not pay off in the long run as much as you’d like, real estate will almost always increase in value over time. When you purchase a property with a fixed-rate mortgage, your interest rate will never go up over time and you will likely end up with a property worth much more than you paid for it. Pay attention to the area in which you’re purchasing a home, and if it’s on the up-and-up, the worth of your home may increase drastically over a short amount of time. Check what other homes in the area sold for in recent years and how much they’re selling for now and see the difference a decade makes in a home’s worth.
When investing in a home, you have to consider the fact that real estate is not a liquid asset. This means you are unable to turn it into money quickly. However, as I mentioned, liquid assets like stocks and bonds have their drawbacks as well. A perk of owning real estate is also the options you have regarding how to handle the property. You can rent it out for extra money, which is a great option if you’re making risky moves in your primary career, such as starting a business or making a career change, and want to have steady income during the transition. You can also decide to fix ‘n’ flip the property, meaning renovating it and reselling it for a higher value.
If you’re looking to purchase a property in Toronto, Waterloo, or another city in Canada and use it as a rental property or in some way generate income from the property (other than selling it and pocketing the difference), you are able to write off the interest as a tax deduction. Canada also has a great program offering tax credits for those who invest in real estate that is used to generate income in industries such farming, logging, fishing and manufacturing.
Bonus: Investing in Canadian Real Estate as a foreigner
If you’re not from Canada but want to invest in real estate in the country, you can still invest. You are not required to be a citizen or even have residency to purchase real estate in Canada. This means you can take advantage of these tax perks and more while investing in property in a prosperous area.