Successfully Investing in Real Estate in Canada

Eight top tips to employ when searching for a profitable piece of investment property in Canada

In some countries it’s easier to locate a decent investment property than in others.  For example in Northern Cyprus homes near to the new golf course and marina make a good bet for those seeking long term capital appreciation – or in Turkey anyone wanting to earn a decent rental income knows they need to head for the southern coastline and buy real estate that makes an attractive holiday let.

But when it comes to successfully investing in real estate in Canada it’s a very different story.  Canada’s property market is well established, mature, quite highly priced already and has a very different dynamic as you move from province to province, city to city and even suburb to suburb.  In this article we detail the top tips you need to consider when searching for investment property in Canada.

1) Don’t be tempted to over stretch yourself financially speaking when it comes to real estate in Canada.  Think carefully about whether any potential perceived benefits from investing in property in general really do outweigh the risks associated with buying an expensive, slow to liquidate investment asset – and only if you are sure they do should you begin to research the Canadian property market for a profitable entry point.

2) Next you need to determine whether you are looking to work your investment quickly and turn it into a capital gain by buying low and selling high or whether you’re interested in realising a regular income from the rental of a property for the long term.  Depending on your decision at this point, your investment approach should guide your buying decisions accordingly.

3) Never base your long term investment decisions on something as risky as the fact that a town is currently popular because a new company has opened up there or a significant change has come about to positively affect the economy of the location.  If you’re investing for long term rental income you need to ensure your property is in a location that will remain in demand even if the oil sands dry out for example or that large factory closes its doors.

4) Use the goldilocks test when it comes to the average prices of property in your chosen area…if properties are very cheap indeed this could mean that your hoped for tenants can actually afford to buy their own homes.  On the other hand, if the area is very affluent and prices are rising quickly be aware that they may be fast approaching a ceiling against which they will stagnate.

5) Consider enlisting the help of a realtor who has experience selling real estate in Canada specifically to investors…and make sure they are licensed and experienced and that you always enlist the help of an independent lawyer to assist you with your purchase transaction.

6) If in doubt about what to buy and who to target think about where market demand always exists – for example in strong university towns and cities there will always be student housing in demand.  Alternatively, because Canada is a nation very popular with emigrants from around the world, bear in mind that the majority that arrive rent initially and congregate in the main urban areas while they are finding their feet – they will need rental accommodation.

7) Is an area up and coming or is it dying?  Is money being invested into things such as transport links, communication and general infrastructure or is the population dwindling?  Look objectively at a given location and see if you think it has long term, sustainable appeal.

8) Finally, bear in mind two key markets if you’re seeking alternative pockets of demand – one, the baby boomers from Canada and elsewhere who are looking for well priced locations with excellent amenities, lifestyle and recreational facilities and two, the suburban home seeker…these are people who are moving further and further out from city centres seeking larger homes on more spacious plots of land and who are ensuring the suburbs of some Canadian cities sprawl ever outwards.  Demand for more space is not abating.

If you employ a methodical and common sense approach to researching your real estate investment options in Canada you will be far more successful in your hunt for a profitable piece of Canadian property.