Real estate as an investment offers predictability in ways that traditional investments cannot.<\/p>\n
\u201cYou can certainly use real estate as a compliment to stocks, bonds, mutual funds, ETFs, and because real estate is a good source of passive income, there\u2019s predictability that you don\u2019t typically get with traditional stocks,\u201d said Cliff Fraser, chief business development officer of Burlington, Ontario-based \u201cReal estate during the pandemic has been extremely resilient. People thought the sky was falling and that there would be rent anarchy, but prices are going up, people are paying their rent and all the good things that were happening prior to the pandemic are still happening.\u201d<\/p>\n
Additionally, real estate investors aren\u2019t required to pour all of their money into investment properties, which could mean securing an insured mortgage or leveraging debt to buy additional properties. Fraser noted that investment horizons are particularly positive for multifamily apartments and industrial properties.<\/p>\n
\u201cDepending on the asset class, you can be a lender if you want to get into direct loans or private mortgages, or you can get into commercial real estate or apartments, and you can put up some equity while borrowing the rest,\u201d said Fraser. \u201cThere are some tax advantages to this, too.<\/p>\n
\u201cTraditionally, apartments have been extremely resilient as an investment and COVID bore that out. We didn\u2019t see the kind of pandemonium that the press predicted. Apartment values have gone up, rent is still going up, and there are no vacancy issues if you have a well-run building in a really good city or town. Commercial real estate will resurge at least in the medium term as we open from lockdown. There is a lot of pent up demand in that sector.\u201d<\/p>\n
Traditional investments not only have potential for volatility, they sometimes contain built-in redundancies that, during slides in the market, can result in twice the losses. Many Canadians have a propensity to purchase multiple ETFs without realizing that the same stock is bundled into more than one, and those inefficiencies can be costly. However, investing in real estate is a surefire way to avert such investment inefficacies.<\/p>\n
Of course, there\u2019s supply and demand disequilibrium in the rental market that\u2019s slated to grow. Last year, Canada announced that it would welcome immigrants over the next three years, which, in combination with permit workers, international students and hefty domestic demand, will yield promising returns on investments.<\/p>\n
\u201cBecoming an active landlord is a great idea for many people who don\u2019t get a lot of satisfaction out of traditional investing,\u201d said Fraser, although he advised caution in choosing condominiums over traditional multifamily dwellings like triplexes and fourplexes. \u201cBe cognizant of the fact that if you have one or two condo rental properties, your tenant can leave and hurt your cash flow. The other thing to be cognizant of is creeping maintenance costs as the building ages because they become punitive. You might have low condo fees in the beginning but by year five they can ramp up.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"
Real estate as an investment offers predictability in ways that traditional investments cannot. \u201cYou can certainly use real estate as a compliment to stocks, bonds, mutual funds, ETFs, and because real estate is a good source of passive income, there\u2019s predictability that you don\u2019t typically get with traditional stocks,\u201d said Cliff Fraser, chief business development […]<\/p>\n","protected":false},"author":6,"featured_media":23671,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[4],"tags":[],"acf":[],"_links":{"self":[{"href":"https:\/\/www.canadianrealestatemagazine.ca\/wp-json\/wp\/v2\/posts\/9178"}],"collection":[{"href":"https:\/\/www.canadianrealestatemagazine.ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.canadianrealestatemagazine.ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.canadianrealestatemagazine.ca\/wp-json\/wp\/v2\/users\/6"}],"replies":[{"embeddable":true,"href":"https:\/\/www.canadianrealestatemagazine.ca\/wp-json\/wp\/v2\/comments?post=9178"}],"version-history":[{"count":1,"href":"https:\/\/www.canadianrealestatemagazine.ca\/wp-json\/wp\/v2\/posts\/9178\/revisions"}],"predecessor-version":[{"id":23670,"href":"https:\/\/www.canadianrealestatemagazine.ca\/wp-json\/wp\/v2\/posts\/9178\/revisions\/23670"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.canadianrealestatemagazine.ca\/wp-json\/wp\/v2\/media\/23671"}],"wp:attachment":[{"href":"https:\/\/www.canadianrealestatemagazine.ca\/wp-json\/wp\/v2\/media?parent=9178"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.canadianrealestatemagazine.ca\/wp-json\/wp\/v2\/categories?post=9178"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.canadianrealestatemagazine.ca\/wp-json\/wp\/v2\/tags?post=9178"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}