Toronto Real Estate

1. Invest on a House To Reside In

This is the traditional approach for real estate investment: purchasing a main (principal) residence where you can live in. By doing this, you get a place to live--eliminating home rent costs--, when you are also buying a long-term investment. By paying your own mortgage instead of spending money on rent, you're growing your net worth.

There are two main considerations in this type of property investment: the home's projected appreciation, and ensuring your mortgage's interest rate is reduced enough so this investment can beat the inflation in the long run.

You would want a home situated in a good neighborhood with access to highways and public transportation. Close proximity to the school district, restaurants, shopping malls, and parks is also preferred. However, finding a house like this in big cities like Toronto and Vancouver can be difficult since the purchase price is already higher than Canada's average. Calculate carefully and be sure you'll get a good gain in the long term (10-15 years time frame or more).

2. Flipping a House

In this sort of property investment, we are generally looking for fixer-upper deals: under-priced houses in need of renovation or repair, which you can sell for profit following the repair. House flipping, however, is often not as simple as it's advertised. You might run into complications such as wiring issues hidden inside the wall (which could significantly increase the repair cost), or you may end up without any buyer in a long time.

Working with a knowledgeable realtor may help in reselling the property according to a desired cost. Also, carefully assess the property to make sure that it doesn't have any significant fault.

3. Buying Rental Properties

Buying a rental property is probably the best way you can produce a relatively short-term profit while mitigating your risks. The main idea is to finance a house using a mortgage program, and get a tenant to rent your residence, where the rental income will cover your mortgage payment and a profit on top.

In general, you'd want to look for houses with the same standards as a principal residence: great neighborhood and accessibility to public transportation and facilities (hospitals, schools, restaurants, etc.). You might also need to hire a property manager to help take care of the property while handling the tenants. Just be sure you will have the ability to make a profit after factoring in the cost for property manager.

4. Investing in REITs

If you don't have a substantial quantity of cash available at the moment, or you don't want to commit to a mortgage plan for one reason or another, investing in a Canadian REIT (Real Estate Investment Trust) is a good option.

A REIT in a nutshell is a company that owns rental property (or some other income-generating real estate). This way, you can invest on the REIT through the stock exchange. Another similar option is to invest in property ETF (Exchange Traded Funds) or other real estate mutual funds.

As with any stock exchange investments, however, there are risks involved, so make sure to check for steady stock price history and dividend payments consistency.

5. Buying a Vacation Property

Buying a vacation house at a tourism spot, for example in Ontario near Niagara Falls, can also be a fantastic real estate investment opportunity. The point is to purchase a property in an in-demand place, and you may use property-sharing platforms such as AirBNB to generate income.

You can even buy the property with the old school timeshare approach, where you discuss the property costs and usage period with other owners.