19 Jan Most Popular Real Estate Investment Strategies in Ontario
The Ontario real estate market is profitable and growing. Invest wisely by knowing the most popular property investment models in the area.
Reports show that the Ontario property market continues to grow. And forecasts indicate the demand is expected to keep on increasing. If you’ve been looking to invest in real estate, make sure that you venture into the game well-equipped and prepared. It isn’t cheap to buy a house, and making a profit from selling it is easier said than done.
Learn what’s going on in the market and get advice from industry professionals so you can make safe and profitable property investments. In Ontario, here are some of the most popular strategies for real estate investors.
- Buy and Hold
This is popular because it is one of the most straightforward property investment strategies in Ontario. It can also be one of the easiest to finance as lenders will usually require a down payment of only 20% minimum.
Typically, you buy a nice house in a good neighbourhood with the intention of turning it into a rental. Your tenants’ rent payments are used for paying your mortgage, and maybe you’ll even have some left for maintenance costs and other expenses. Because your piece of real estate is located in a good location, you can expect its value to increase. And when you are ready to sell, you can make a profit from the appreciation. If ever the pricing doesn’t go up, at least you’ll be assured that your mortgage is paid after 20 to 25 years as you have a steady income from rent money.
- Rent to Own
This is gaining more popularity among real estate investors in Ontario perhaps because it can be a more hands-free and safe strategy. This model involves buying property and renting it out to people who are looking to buy but can’t. These persons usually have insufficient money for a down payment or have credit problems. They will rent the home at first, and eventually, buy it from you at a predetermined price and date.
Aside from monthly rental payments, the tenants/future owners will also make “option fee” deposits every month to secure the property. This means you can expect a bigger monthly income. However, make sure that your potential renters/buyers are working with a reliable mortgage professional who can help them work on being in a good financial position when it’s time for them to purchase the house.
This real estate investment model is popular not only in Ontario but in other parts of the world as well. In fact, there are several Canadian and American television shows that focus on this strategy. What typically happens is you search for a home that is in poor condition and is under market value. You give it a makeover, stage it, and then sell it for a decent profit. Your renovating expenses are usually covered by at least threefold.
It may sound easy, but it actually takes a lot of skill and hard work to do it right. You need to have excellent DIY renovation skills or at least work with someone who does. Plus, it can be more difficult to get a mortgage for a “flip” house since you can’t show any income until you’ve sold the property.
Real estate experts advise noting all your financing expenses when you’re computing your expected profit for your flipping investment.
The type of strategies you choose should depend on your risk tolerance, financial situation, and your access to financing. If you are new to the game, make sure to consult with seasoned professionals who understand the market. The Barrie Home Source Team is here to assist you in finding the best real estate financing for your planned investment. Make sure to get in touch with us so we can discuss your options and guide you towards the best home buying decisions.
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