Long before the stock market existed, before salt was considered as valuable as gold, and before humans first struck oil, the asset that was most sought after was land. Real estate investing has evolved, but today investors still seek out land as a way to diversify their assets, earn income, and increase their net worth. These days, however, many are asking whether or not real estate is still a good investment.
Starting in —when the Greater Toronto and Greater Vancouver market were thought to be in bubble-territory—governments began to introduce a series of taxes and mortgage rules. The aim was to slow down heated housing markets—and it worked. By , the national average annual sales price dropped 3. During that same year, sales activity dropped by almost 11 percent.
But the biggest supporters of real estate, as an investment asset class, were unphased; investors like Jim Yih, an Edmonton-based pension and benefits expert and a personal finance blogger who runs the site RetireHappy. His personal net worth grew significantly due to real estate investments. For many, the first foray into real estate as an investment is through the purchase of a primary residence. The time and dedication required to research, investigate, and analyze this purchase helps people appreciate what is required to find a good investment property when they start to build their property portfolio—but they tend to focus on just two factors: purchase price and potential sale price.
For seasoned investors like Yih, these are the wrong targets. An investor only has to pay 20 percent of the purchase price to own percent of the asset; you leverage a portion of your own money to own an asset worth much more, with the potential to increase in value over time. But the advantages of leverage and appreciation should not allow a person to ignore business fundamentals.
Here are strategies to mitigate the most significant risks an investor faces when investing in real estate:. Most investors will require a mortgage to purchase rental real estate. This can alter your debt ratios which can impact whether or not you get the best mortgage or loan rates.
To mitigate this risk, keep track of your credit score you can review this on credit agency sites, such as Equifax or Transunion , pay all bills on time, and talk to an advisor before applying for new credit or renewing a current loan. As Yih mentioned, a rental property needs to be cash-flow positive. An investor needs to budget for a contingency fund money used to pay for costly repairs and maintenance. If the anticipated monthly rent covers all monthly expenses, including a repair fund, then the property is cash-flow positive, which is fundamental for a good investment.
Become familiar with local laws that apply to landlords and tenants. Also, consider adding insurance coverage to protect yourself from damage like vandalism. You can potentially escape any long-term tenant headaches by establishing a short-term rental business; just be aware of how this will affect your mortgage and insurance. Toronto — Downtown Core. Toronto — Greater Toronto Area. Barrie and surrounding area. With daily GO Train service officially running to St.
Catharines at the beginning of this year, this city is right at the top of our best places to invest in real estate ontario list. This is years ahead of schedule, and the GO schedule will expand in the coming years, making the commute into Toronto easier than ever. This area has grown in popularity in recent years with investors as more and more people are seeing the charm and beauty of this city in the heart of wine country.
Now, with train service into Toronto, we expect to see more and more commuters looking here. The North End is a great family-friendly area with charming homes and high rental demand. The south end of the city is home to many Niagara College and Brock University students.
Catharines is that there are so many investing strategies that can work well in the city, you just need to keep location in mind and strategize accordingly. Hamilton continues to be a hot spot, growing in popularity. Hamilton is no longer the hidden gem it was a decade ago. There are many hot pockets throughout the city that are continuing to spill over into neighbouring streets as Hamilton continues to transform. The Hamilton Mountain and the West End of the city have been popular spots with home investors for years.
Toronto downtown comes as the third option in our best places to invest in real estate ontario list. The city continues to draw people from across the country and the globe. Toronto is hard to beat for anyone looking for location, location, location. Population: 6,, Fourth in our best places to invest in real estate ontario list is the greater Toronto area. Outward development is limited because of the lake and protected green space, and as demand continues to pour in, developable land is a premium, and the GTA is starting to see a densification transformation.
Population: , Kitchen and Waterloo continue to thrive with a growing tech industry and a large university presence, all without the same limiting development restriction caused by the Greenbelt. Right now, the city is a bit of a trek into downtown Toronto, but Kitchener-Waterloo has a growing workforce which has its own appeal. Also, being on the far side of the Greenbelt, we anticipate long-term this area will continue to build up and out as developable land disappears around Lake Ontario.
Multi-unit homes have been a good investment in Waterloo, and single-family homes continue to be a good option in Kitchener. The city has seen growth over the last several years as a bedroom community for the city of Toronto, despite its minute commute to downtown.
However, with GO transit stations in the south end of the city, it continues to draw people from the city. There is still plenty of opportunity in this growing city, which is why it makes our best places to invest in Canada list.
Population: , Kitchen and Waterloo continue to thrive with a growing tech industry and a large university presence, all without the same limiting development restriction caused by the Greenbelt. Right now, the city is a bit of a trek into downtown Toronto, but Kitchener-Waterloo has a growing workforce which has its own appeal.
Also, being on the far side of the Greenbelt, we anticipate long-term this area will continue to build up and out as developable land disappears around Lake Ontario. Multi-unit homes have been a good investment in Waterloo, and single-family homes continue to be a good option in Kitchener. The city has seen growth over the last several years as a bedroom community for the city of Toronto, despite its minute commute to downtown. However, with GO transit stations in the south end of the city, it continues to draw people from the city.
There is still plenty of opportunity in this growing city, which is why it makes our best places to invest in Canada list. Ajax is still on the smaller side at around , people. Ajax is located on the North side of Lake Ontario and is a popular choice for Toronto commuters. For people looking for suburban living with convenient access to the city, Ajax is a solid place to live. While St. Catharines has definitely become a target spot for many investors, the entire region of Niagara is seeing an increase in development and people moving to the area.
Niagara provides a picturesque backdrop on life, with easy highway access to the USA border or into Toronto and with planned and approved transit coming to cities through Niagara, we predict the attraction will only grow. Investors are successfully investing throughout the Niagara Region. By no means is this a complete list of the cities in Ontario that are good places to invest, but these are some of our favourites this year. With the right investment strategy, Ontario is a great place to invest in real estate in and we hope you enjoyed our best places to invest in real estate ontario list!
Also, check out out best places to invest in Ontario list! Your email address will not be published. With that in mind, here are the best places to invest in real estate in Ontario …. Toronto — Downtown core. Niagara Region. Related posts. Best Rental Markets in Ontario in November 6, July 9, Hard Money vs. Unsound Money June 11, Leave Comment. Cancel reply Your email address will not be published.
If you do the math correctly and you continuously have tenants paying rent, you will have the cashflow to help cover your mortgage payments. Ensure that the rent you charge your tenants is enough to cover your mortgage payments and maintenance fees. The Greater Toronto Area has been a popular area for people using this investment strategy. Since it is a highly desirable place to live with many lifestyle amenities, job opportunities, and proximity to public transit.
Be strategic when choosing the right properties to increase your chances of renters being interested. If done correctly, this can be a solid investment, but you may have to get your hands dirty. House flipping starts with finding properties in the province that are priced under market value. These properties may be undervalued because they need upgrades and require renovation.
To flip a home, you need to see the potential of what the home could be. If you swoop in and secure a property at a reduced sale price, to successfully flip the home, you will need to either do the renovations yourself or hire a contractor to do them. Strategic upgrades to key areas such as the kitchen and bathrooms will increase the value of the home.
To be a successful house flipper, make sure you stay within budget. Under the right market conditions, when you sell the home it will hopefully be at a higher sale price than the amount of money you invested in it. For homebuyers who are looking for an opportunity to dive into the market, starting the home-buying process while home prices are down could be a smart move — providing prices rebound again.
The pandemic put a temporary pause on home sales in April , however activity across Ontario real estate markets has picked up again quickly, and prices have remained resilient. With that being said, there are plenty of markets offering great investment opportunities.
An investor can purchase a house or condo that is priced below market value and hold onto it for the long term until the value increases again — and in Ontario, long-term values have been on an upward trajectory.
During the time you maintain ownership of the property, you can have tenants rent it, and used the income to cover the mortgage payments. Eventually you can sell the property and get a high ROI from the increased value. By then, a good portion of your mortgage would have been payed off using rental income.
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