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 hold” 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 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.
For 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.