Ten Reasons to Invest in Real Estate in Canada

10 Reasons Why One Should Invest In Real Estate in Canada

1. Rental Home Incomes :

One of the most common and effective forms of investing in real estate in Canada is to own rental properties and become a landlord. This includes buying lofts, condominiums, single-family homes, or making ensuite condos in your home that are accessible to lease to occupants. When you buy an investment property to be rented out, you can use the monthly rent payments from tenants to cover the monthly mortgage payments and pocket some extra cash. This is a form of passive income that has become extremely popular for homeowners. Since Canada is witnessing a huge rise in the number of immigrants planning to settle, the demand for accommodation, primarily rental (where they tend to settle in the initial years) is ever increasing.

2. Primary Residence :

There is a comfort in buying real estate and the pride that comes with homeownership. When you buy a primary residence, you don’t just buy a place to live in – you are making a long-term investment and forming an asset. The Canada Revenue Agency (CRA) allows you tax exemption from any profits you earn by selling a principal residence. You get complete exemption on all capital gains tax in case you are selling a principal property. It’s a major reason that promotes investing in real estate in Canada for beginners.

3. Low Bar To Entry :

Practically anyone can enter the market as it requires very little knowledge and does not impose any harsh restrictions. Also, you can choose to take the help of realtors or PREC for any advice or to manage & minimize the efforts. Or you can eliminate the hassle entirely by investing in REITs or real estate investment trusts.

4. Tangibility :

Real estate is a tangible asset that you can see with your own eyes and fix up with your own hard earned equity. It can help diversify one's portfolio of properties. Having low correlation with stocks, investing in real estate in Canada can help you reduce losses during market crashes.

5. Tax Benefits :

Canada offers numerous tax advantages like Amortization of the purchase price of 4% per year, Exemption from social security contributions. Also, the Canada Revenue Agency (CRA) allows you tax exemption from any profits you earn by selling a principal residence. Investors can also defer income taxes by deterioration, also discount any costs for keeping up with and running the property. For eg. they can deduct mortgage interest.

6. Constant Growth :

Research shows that the real estate market in Canada grows by 5.5% every year. Such a meteoric rise of real estate prices in recent years has turned properties into a way to both park money and make money. It clarifies the doubts of all those wondering whether should I invest in real estate in Canada or not.

7. Favourable Conditions for Foreign Investors:

Canadian law does not impose any special conditions on foreign investors. They are subject only to the same obligations as Canadian landlords, so there are no additional tricky or complicated laws to navigate.

8. The Power Of Leverage:

Banks are willing to lend out piles of money for real estate at near-historic low interest rates. This leaves a requirement of very little cash of their own for investors. So, you can make an investment even with limited financial resources.

9. Potential Opportunity:

Those looking forward to invest in real estate in Canada as beginners shouldn’t be scared of a negative cash flow. Rather, they ought to consider it to be a possibly open door. As their resources develop, they can renegotiate their properties and utilize that cash to grow their portfolio. A larger number of properties will acquire appreciation quicker than one, consequently expanding a financial backer's riches. Negative income might actually diminish annual duties, so they'll have more cash in excess.

10. Scope of House Flip:

With a house flip, you buy a “fixer upper” with a lot of potentials. Target houses requiring some cosmetic damages, renovate & repair it quickly, turn around and sell them for a handsome profit.

Pro tip -
Summing Up, Canadian laws are pretty liberal when it comes to owning real estate. You don't need to be a Canadian citizen or even live in the country, and property taxes and interest expenses are tax-deductibles. Factors like these, make it safe to invest in real estate in Canada. However, to have profitable results, nonetheless, you ought to know about the expense ramifications at each and every phase from claiming the property and occupying or leasing it to ultimately selling it.