To say that the real estate market has been unpredictable over the last few years is a bit of an understatement. Housing values can be up, up, up, then down, then up again, but never quite reaching that all-time high.
Sometimes, the term roller coaster comes to mind. After a period of flatness, even that description doesn’t cover it anymore. Still, everyone has their predictions and ideas as to what will happen next, even in the midst of interest rate fluctuations and a changing economy.
For the most part, there’s one question on all of our minds: Is buying a house a good investment in today’s evolving landscape? There is no easy answer. That’s why today’s post will explore the idea of real estate investing from every angle.
A smart property investment in Ontario begins with the right purchase. For more specific guidance, download our detailed buying checklist.
Why Invest in Real Estate?
Even if you have no plans to flip a property or rent it out, a house in Ontario can absolutely be a worthy investment. Think of it just from the perspective of your primary residence, which is the single most valuable asset for many people. That’s why it’s normal to want to buy at the lowest possible price, before the market takes off and values begin to rise.
If prices drop after your transaction, the loss tends to be short-lived. That may be cold comfort if you buy at an inopportune time. Nevertheless, there is more to real estate than the numbers on a financial statement.
Yes, your house is a significant financial asset, but it is also much more; you’re not just making a business decision, you’re buying a home. Regardless of how the market fluctuates, you now have a sanctuary, a place that is truly yours. There are undeniable emotional benefits that go along with your purchase, not to mention a lot more security.
Housing values can drop, but you no longer have to worry that the landlord will evict you or raise your rent. And over time, property values rebound, and your equity will grow. We have seen many corrections and dips in the past, but the long-term outlook has always been positive.
Should you choose Peterborough when searching for the right opportunity in real estate? The posts below might convince you:
- Where Is the Best Place to Live in Ontario?
- Is Peterborough Dog Friendly?
- Why Peterborough is Perfect for Families
Is Investing in Real Estate Worth It?
Now let’s consider real estate investing from the point of view of someone who aims to grow their portfolio and net worth. In the past, financial advisors have long proclaimed owning property as one of the safest and most profitable investments anyone could ever make. You might argue that today’s market conditions make it a little less safe and a little less profitable.
High housing prices combined with high interest rates present real challenges to an investor. However, careful analysis and expert guidance from an experienced real estate team can help you make sound decisions with a strong likelihood of future success.
Over the long term, investing in real estate can still be very profitable, as long as you fully understand your responsibilities as a landlord. Think of the rental market, especially in Peterborough. Demand is high, and vacancy is low, which bodes very well for your chances of finding a tenant.
Searching for a home in Peterborough or the Kawarthas? Start by browsing our featured listings.
What about house flipping?
A volatile market has made this avenue less profitable and more risky, but some skilled investors are still finding ways to make it work. Just keep in mind that government legislation in response to a critical housing shortage makes short-term profits much less likely. House flipping today is more about creating real value in the market rather than snapping up properties for a steal, making a few quick upgrades, then selling at a profit.
Contrary to what some people once thought, real estate investing has never been about a quick buck. In the current market, it’s more critical than ever to take a forward-thinking approach.
A well-thought-out strategy is more critical than ever when investing in real estate in Canada. The posts below will help you stay on track:
- The Beginner’s Guide to Investing in Real Estate
- A Landlord’s Survival Guide in Peterborough
- New Landlord Checklist
How to Invest in Real Estate
For maximum success, think of that old saying, “hope for the best, prepare for the worst.” Start by reviewing some of the worst-case scenarios that could happen. The point of this isn’t to be morbid or to discourage you. It’s to give you a contingency plan so you can carry your plans through to fruition. For example:
- You buy a property, and real estate values decrease shortly afterward. Budgeting carefully can help you get through the market correction until prices rebound again.
- You plan to rent your unit, but it takes longer than you hoped to find a tenant. Building up some emergency savings can allow you to carry your mortgage in the meantime.
- It turns out the property needs more work than you anticipated. Skillful negotiation to ensure you purchase the unit on the low end of your budget will help cover the shortfall.
In every scenario, a real estate team with investment experience can help you reach your goals. To start with, we can guide you to properties with the highest potential in the first place. We can even vet tenants on your behalf and connect you to property management companies to manage your investments.
If you decide to move forward, there is no obstacle you can’t overcome with the right guidance and support. There may be some bumps and curves in the road, but it will be an exciting and rewarding journey all the same!
Do you have more questions about whether or how to invest in an income property? Our Peterborough real estate agents are committed to helping you get results. Reach out to team@jeffandkatie.ca or call 705-243-9797 to start the conversation today.
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