When examining their investment options, many Canadians are now encountering a number of important questions. Do they enter the stock market and invest their hard-earned money in specific market companies, or do they place their investment in a more tangible product such as real estate? For the right type of investor, real estate can hold a number of financial advantages. Within this article, we’ll highlight why rental properties are good investments.
Tenants Amortize the Mortgage
The rent from tenants can provide you with a direct income each month. Few other types of investment offer this level of direct income during the early investing periods. The rental property owner will be able to begin recouping their mortgage costs from the moment they find a tenant for the property. Those that do their calculations well ahead of time, and place their rent prices comfortably above their costs can ensure a significant return for their investment in the long-term.
Property Can Increase in Value
Another clear advantage of rental property investment beyond the monthly rents is the increase in value of the main asset. This is where rental properties share a comment benefit with other forms of investment. However, the data shows that rental properties in Canada have significantly outperformed stock market investments in recent years, as properties rise in value year-over-year.
Real estate values in Canada are also steady. They provide a stable wealth accumulation strategy, compared with stocks, which can fluctuate from one year to the next and are dependent on factors often outside the stock market and the stockholder’s control.
Multiple Tax Benefits
Real estate investors will also benefit from multiple tax advantages. Certain expenses can be deducted from annual taxes, including property taxes, maintenance, upgrades and mortgage interest. In addition, the losses stemming from rental property overheads that exceed income are also tax deductible. This shields the investor from having to spend additional money on the property.
Great Range of Options
The real estate marketplace offers a wide range of options for all types of investors. For those with significant resources, there are multi-tenant buildings that can be upgraded to maximize rental value. For families looking to enter the real estate investment marketplace, there are smaller homes that can be rented to supplement work income. It’s a wide open marketplace that offers opportunities for many.
There are a great many benefits to becoming a real estate investor! To learn more on the industry and the real estate marketplace in Canada, contact our expert team today.