The Canadian real estate market makes an attractive place to invest in because of its geographic location and general stability of the economy. Experts say the secret to successful real estate investing in Canada is research. Get good advice and look for clues in sources such as the new Canadian census data. The pay-off is two-fold: ongoing cash flow and capital appreciation.
1. Don't be tempted to over stretch yourself, financially speaking. Think carefully about whether any potential perceived benefits from investing in property in general 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. 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 realizing a regular income from the rental of a property for the long term. Your investment approach should guide your buying decisions. Simply identify what you really want from the property. "Do you want to make a quick $30,000 in a very short period of time or would you be happy with earning $800 to $1,000 a month for the rest of your life?"
3. Determine a geographic location to invest in Canadian property based on what you want to buy. Use a nationally-based Realtor in Canada with experience in your specific area. Ignore national statistics, and focus on the numbers and trends that directly affect your market. Check if population growth, average income and job creation are faster than the provincial average. 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 recently opened there or a significant change has come about to positively affect the economy of the location.
4. Is the area's affordability index in the hot zone? You don't want the property to be too expensive or too cheap because if it is too cheap, renters will become buyers and if it is too expensive, the property values may stall.
5. Is the location forward looking? Is it 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 carefully at the location and see if you think it has long term and sustainable appeal.
6. Make the trip. Travel to Canada is easy. It is a good idea to look at what you are buying.
7. Obtain professional advice both at home and in Canada. Engage the services of a tax lawyer on both sides of the border as well as an accountant. For instance, as a non-resident you must pay tax on rental income and pay tax when the property is sold.
8. Start small. For a first-time investor, try a town house. These are not only affordable, but there's always a good supply and demand for them and they can give you an affordable income. This holds true in bigger cities such as Toronto, Vancouver, Montreal and Calgary, where immigrant populations are high. Remember, new immigrants prefer to rent for their first few years in the country and they tend to choose locations close to transportation systems, malls and grocery stores.
9. Finally. Ensure you investigate specific real estate property rules in the individual Canadian province where you invest. Rules are different from province to province in the areas of land registry, taxes, reporting and other important areas. If you use a 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.
Don't forget to research, research, and research to let the money flow in. Good luck!