Nowadays, with the current financial climate of unprecedented rents and volatile prices, many people are flocking towards long-term and profitable real estate investment opportunities to secure them against market shocks. More so, in countries such as Canada that allow non-residents to invest and buy property of any size or type, people tend to be even more attracted towards real estate investment.
Another reason for a marked increase in real estate investment is the fact that people want to put their money where it can yield a steady and guaranteed profit. Gone are the days when people used to invest their hard-earned money in stocks alone. Nowadays, building wealth is the name of the game. This entails diversifying your investment portfolio so as to avoid putting all your eggs in one basket.
As a result, financial experts and consequently, the general public has increasingly recognized the importance of owning property not only to get a steady cash flow from renting it out but also mortgaging it to ultimately own a house in the future.
So if you plan on doing the latter, and in fact, wish to own your very own dream home, look no further. We have compiled a comprehensive list of the top real estate investing tips to help you get started on your journey towards purchasing your dream home.
Take A Look At Your Current Finances And Options
Many people believe that you need to be at a certain point in your life, financially speaking, before you can purchase a home. While there is some merit to that, it is not entirely true.
This is because buying a home has increasingly become easier and more accessible, especially for people with a good credit history. It usually starts with a downpayment of a certain percentage, usually between 10% to 25% of the value of the house. This can be achieved after a few years of saving and cutting down on, say, vacations or other extravagant spending costs. Therefore, a financial valuation of your assets is crucial before you weigh what options are suitable for you.
In this regard, profitable real estate investing in pre-construction houses may be your best bet in terms of return on your investment. It involves buying at today’s low prices in the hope that the value of the property will appreciate in the future. Usually, these houses or condominiums are bought during the development phase at cheaper prices, helping you avoid heated bidding wars or even artificially inflated prices from realtors trying to make a large profit.
Pre-construction homes are also great since you won’t even have to pay the mortgage till the home is complete, which means that you can still access loans for other purposes while ensuring that you have a profitable asset. Additionally, you can choose the type of finishings you want and custom-build almost anything so that it perfectly reflects your aesthetics. After all, designing the house interior according to your personal taste is truly the definition of a dream home!
So depending on your current earnings and savings, you can always set your sights on your dream home from the get-go and make a downpayment, and in a few years, you will have the house of your dreams!
Look For Up And Coming Neighborhoods
One of our top pieces of advice would be to invest in gentrifying neighborhoods. This is great since your cost of investment will be low while the value of your property will keep on increasing.
These are neighborhoods that have not been fully developed but are increasingly witnessing an increase in facilities and amenities. Following are some signs to look out for when considering to invest in real estate for your dream home:
- Buy in an area that is in close proximity to an up-and-coming market or chain of stores, commercial property, or new construction prospects.
- Consider the quality of the school district, as better education institutes usually translate into high property value.
- Public transport facilities always tend to increase the value of the property, so better think forward and read up regarding future transport infrastructure plans such as public transport or road expansion projects.
When you spot development plans by large contractors in a given area that is relatively new and underdeveloped, that is the time to move in to make smart real estate investments.
Know The Market Inside Out
Prior to investing, it is crucial that you are aware of the ups and downs of the market. This doesn’t just mean the price fluctuations, but refers to future valuation of a piece of property, the estimated cost of renovations, if any, and the forms of financing options available to you.
Usually, it is best to hire a realtor as they are experts in navigating the real estate markets to help you determine the most suitable property as per your budget and needs. They can also provide valuable advice pertaining to equity gains from purchasing the home.
Sometimes, in places such as Toronto, which has 140 neighborhoods, it is easy to get overwhelmed when deciding the ideal location for your dream home. A real estate agent can help you narrow down the best possible options and even help factor in personal requirements such as proximity to schools, markets, hospitals, public transport, and so on.
Keep Other Expenses In Mind
Buying a home is not a one-off expense. It tends to involve a host of other fees that you should factor in when budgeting to purchase your dream home.
These include land taxes, registration fee, legal fee, insurance fee, or any other taxes such as property tax or capital gains tax you may be liable to pay. It is always prudent to think long-term and have a forward-looking outlook when making such a huge decision to avoid any undesirable financial surprises in the future.
We highly recommend getting a lawyer on board to help you sift through the financial obligations before you secure a deal.
Real estate investment involves foresight and smart decisions at the right time and in the right location. The same goes for purchasing your dream home, regardless of where you are in the world. So in order to ensure that you stay on the right track, keep referring back to this guide to help you feel grounded and confident in your decisions, and always remember to give this process ample time and have loads of patience.
Happy house hunting!