Top 5 Strategies For Canadian Real Estate Investors

There are many ways to invest in real estate. As with any investment, each decision comes with unique opportunities, risks, and ease of entry. If you are planning to buy properties in Toronto or any other city in Canada, this article introduces you to some investment approaches to use. The method chosen depends on your personal preferences and of course your purchasing power.

Buy and Hold

A good number of investors in Canada have used the “buy and holdcondo living investment strategy. Ideally, this strategy is mostly used when buying properties that are slightly under market and holding it in anticipation that they will appreciate. As you wait, you might have some tenants live there and help you meet the mortgage costs. This investment strategy is quite common due to its simplicity.

The Flip

The Flip is a popular strategy that is used in Canada and beyond. Ideally, this strategy involves buying a home at an incredibly low price, renovate it, and sell it at a better price. However, the returns offered by this strategy depend on the expertise of the renovator. If by any chance you know someone who does a good job, the rewards can be satisfying.

The Hybrid Strategy

This investment strategy is essentially a combination of the “buy and hold” and the flip. It all starts by finding a property that is reasonably undervalued, renovating it, and holding it for the long term. If the market process seems promising enough in future, the investor then proceeds and sells it at a better price. Investors using this strategy often rely on multiple financing options as the payoffs are not immediate.

Joint Venture

buying a homeFor those that are not comfortable buying a home or property in their home, a joint venture can help you with this. Ideally, this refers to a partnership with someone that shares the same investment goals. For this investment, it is imperative to have an agreement first to avoid disagreements and provide ways of solving any issue in future.

Rent to Own

Another investment strategy that is slowly gaining popularity in Canada is the rent to own. As such, after buying property, the investor looks for a future owner. These are often people with the desire to own a home but do not have the finances to achieve this dream at least in the short term. As such, investors using this strategy often propose an agreement that will see them purchase the home in future.

Investment Tips for International Investors In Canada

Canadian real estate is open to both Canadian residents and internationals. Ideally, you can never say that anyone has the upper hand here. You will be surprised to have Canadian nationals who have made their fortunes abroad being treated as international investors when it comes to real estate. Nevertheless, Canada welcomes investors from all countries. Besides the 15% tax levied on the purchase price, there are no significant restrictions on what you can buy and the amounts you can spend here.

Financing

buying a home

Most lenders are also willing to finance home purchasing for non-residents. However, when it comes to financing, the rules do not change much either only that you will be required to make a more substantial down payment compared to the one paid by a Canadian. Most lenders have to verify your source of income and at the same time your creditworthiness.

Taxes

Like with any investment, it is imperative to be prepared for taxes. Non-Canadian citizens are expected to pay at least 15% in closing taxes especially when buying properties around major cities like Toronto. You might be surprised to realize that both international investors are subject to the same land transfer taxes in an area like Toronto. You should also be prepared for tax implication when selling a property.

Insurance

Nonresidents often have some challenges in obtaining insurance policies. This complicates the buying process considering that most lenders are often reluctant to offer a mortgage without insurance. Thus, if you are planning to invest in Toronto or anywhere in Canada, make sure to get an insurance quote before making a purchase.

Work With a Realtor

The services of a realtor are essential when it comes to finding the best real estate deals. If you are not conversant with the rules and nature of the Canadian real estate market, it is imperative to walk with someone who understands the intricacies of this market. If you need to do this while overseas, you need a realtor who is known to help absentee clients find the right deals.

Make an Offer

housing unitsThe last step to take when buying property involves making an offer. You can do this while still abroad thanks to technological advances that make signing documents and sending them via online platforms a breeze. At times, you might be required to sign the mortgage documents or avoid these altogether with the power of attorney.

The tips shared above confirm that investing in Canada is not as easy as it seems. With the right finances, you also need a decent real estate agent, and you are good to go.