With the Ontario housing market on fire and no signs of slowing down even during a worldwide pandemic – it can be very easy to feel like you’re the only one missing out on the investment property train. It can seem an impossibly daunting task, but with a bit of patience, creativity and hard work, managing an investment property could be a rewarding and challenging endeavour. Here are three directions you could take to acquire an investment property and make it work for you.
1. Buy A Fixer-Upper And Live In It While Renovating It.
Who says your first home has to be brand-new and freshly renovated? Many people are opting to purchase a fixer-upper, and live in it while they renovate the home. These homes, while coming at a more affordable price point depending on where you live, will often need a lot of tough love and care. If you are up to a challenge, this option could scratch your homeownership itch and DIY itch at the same time.
With that said, you would have to live in said home as your primary residence for two years before you can sell it. If you sell before that time period, you will have to pay a hefty Capital Gains tax for it. In order to avoid paying exorbitant taxes, create at least a two to three-year plan for your home, basing it off any renovations.
2. Leverage Your First Property To Purchase A Second
Purchasing an initial property, then leveraging that property as an asset to acquire financing for a second property has proven fruitful for many. Renting a property out while you live in the other can help you carry the costs of the mortgage as well as any upkeep. With properties consistently rising in value year after year, this can be a great way to expand your assets.
However, this option can be quite risky. Not only will you need a substantial amount of funds beforehand to make this happen, any unforeseen circumstances – such as not being able to secure reliable renters, or a surprise house issue that needs to be fixed ASAP – can create setbacks.
3. Consider Commercial Properties
Although the initial investment amount is high for commercial properties, once secured, this could be a great way to generate steady income due to the lengthy nature of rental contracts of commercial properties. Unlike residential properties, commercial properties can result in higher returns due to higher rental costs.
In addition, your renters will have it in their best interest to look after the property. After all, they will most likely be using the space to further their own business. This means that the owner will not need to worry as much when it comes to minor upkeep, largely being hands-off and leaving the renter to configure the space to fit their own needs.
Before You Leap into Investment Property Ownership
More young Canadians are seeing properties not only as homes, but as future investments. Before you take the leap into investment property ownership, it is crucial to look around for listings that fit your bill.
Are you interested in booking viewings of commercial or investment properties to start? Let our real estate agents show you around and help you find the perfect listing that is right for you. Justo is committed to providing you with superior service, putting customer satisfaction at the heart of everything we do. Contact Us Today!
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