Investing in Real Estate is not a fly-by-night, seat-of-your-pants type of investing. Even the most risk-averse, conservative investors can comfortably make a profit over time through appreciation.
Let’s look at an example:
You buy a property for $250,000. With no lavish renovations, and with only the most basic maintenance, your property would appreciate in value at an average of 1.5 to 2% annually. This is a conservative estimate. In some markets in the GTA, those numbers will be much higher.
If you hold on to this property for 25 years, those few percentage points of appreciation will add up and that property is now worth $410,151 (a profit of $160k!). That’s a total of 64% added value.
But if you use this as a rental property, you have the benefit of having tenants paying down your mortgage that whole time, all while providing you with passive income via cashflow (AKA money in your pocket.)
Here in Canada we can take advantage of tax breaks and deductions that are designed to incentivize owning rental properties and creating much needed housing supply. So every dollar you spend on renovations and maintenance will lower your overall taxable income. Again, more money left for you and your family at the end of every year.
If you have the right team who can properly evaluate a property, investing in rental properties is almost all upside. Reach out to your Ontario Assets expert today!