Making real estate a part of your investment strategy can help you grow your equity and secure your future financial freedom, but building wealth takes patience. True real estate investing doesn’t have a quick turnaround: it takes 5 to 10 years for the property value to appreciate so you can realize the full gains from your purchase. In the short to medium term, rental income can provide some cash flow, and over the long term, the high returns and financial security are well worth the wait.
Deciding if residential real estate investing is right for you
Before making your first real estate investment, think about what you want your future wealth to look like. Start by evaluating your current income, your other investments, and your future financial and lifestyle goals, then consider how best to achieve them. Since it’s a significant long-term financial commitment, buying real estate is something you want to think about carefully in the context of your own life, family, and financial situation.
The timeline for realizing full gains from real estate is relatively long, so it works well for someone with a stable income who wants to grow their equity. It’s not about making money quickly for current spending, and while real estate investment should generate cash flow through rental revenue, it shouldn’t be intended to replace your current income.
Real estate investing is not house-flipping
Real estate investing differs significantly from house-flipping, which is a style of real estate buying and selling that focuses on the purchase and reselling of a property for quick profit. It tends to be hands-on, requiring rapid renovations and selling the property again within a few months, a process which presents significant risks and can easily lead to losses instead of gains.
A stable, growing market
Compared to the volatility of the stock market, real estate investing is a steadier option, one less prone to extreme fluctuations. While the stock market overall moves upwards, individual stocks can fluctuate wildly and are much more likely to crash unexpectedly. The real estate market can also fluctuate, but Canadian properties, especially in growing regions outside major cities, have proven to be consistently solid long-term investments, and a great way to balance risk in your investment portfolio.
In recent years, the Ontario and especially the Durham region housing and rental markets have been trending upward, with rising property values and high rental potential, making a strong case to invest there now for the future.
Partnering with experts
Getting started with real estate investing can seem daunting, which is why working with an experienced partner can be an effective way to put your money to work for you while remaining hands-off. With ARTOL, you leverage our expertise and only invest in well-researched, quality properties that are the most likely to bring the best returns for both parties.
With the BRRRR real estate investment strategy (buy, renovate, refinance, rent, and repeat the process), property value and equity climb while rental revenue generates cash flow. By renovating a property, its value rises quickly, as does its rental income potential and its future sale price.
As you think about your long-term financial goals, real estate is a smart way to diversify your portfolio, mitigate risk and make sound, effective investments that can set you up for your long-term financial freedom.
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