Should You Buy an Investment Property?
Buying a home is a lifelong dream and accomplishment for many Canadians. In addition to buying a home to live in, many Canadians are choosing to buy an investment property to provide a steady flow of rental income and cash in as the property appreciates over time. Whether you would like to buy a single family home, duplex/triplex, or apartment building, rental properties can be a smart investment.
For example, buying a triplex near Carleton University or the University of Ottawa could bring in enough money each month to pay for expenses in that building and your home. Or, you could purchase a single family home in Westboro or the Civic Hospital area and rent it out to an executive or diplomatic family for a steady income. However, buying an investment property isn’t for everyone as you have to deal with tenants, maintenance duties, and unexpected expenses. Is it right for you? Before you become a landlord, make sure you get appropriate landlord legal advice.
Let’s get one thing out of the way first—what is an investment property, precisely?
An investment property is a home, complex, or other piece of property that is acquired with the intention of using it to gain a return on one’s own investment. Put another way, when you buy or put money into an investment property, you’re not necessarily concerned with actually living in or otherwise using the property yourself, but rather leasing, selling, renting, or otherwise using the property as a vehicle to drive up a profit for yourself.
Investment properties are sometimes conflated with quick property sales or “house flipping,” which is the custom of quickly buying, renovating, and selling a home with the goal to turn the quickest, biggest profit possible. However in this context we’re talking about buying a home in order to benefit from the monthly rental income.
So, should you buy an investment property?
That probably depends upon your interests and expectations. House flipping is a very controversial subject among those in the know economically and otherwise, and so while the “quick investment, quick reward” aspect may seem alluring, it probably behooves you to do an extensive amount of research before making a decision. Talk to the Geoff & Bobbie team and we’ll help you make the right decision for your current and future needs. For example, it may make sense for you to dip your toes in the market by buying a single apartment or condo as an investment property.
On the “flip” side, investing in properties that can be rented on a more long-term, sustainable basis may be the more solid choice. As stated, it’s harder for many to buy homes now than it has been in the past few decades. Then consider that there are plenty of university students looking for good, affordable apartments tor rent and diplomats looking for reliable short-term housing options in Ottawa. The market for properly managed investment properties becomes apparent.
Speak with your real estate agent from the Geoff & Bobbie team to discuss your options!