Canada offers a safe haven to investors who seek to have their money in a stable environment, lower interest rates and strong economic growth. The Greater Toronto area is one of the TOP cities to invest in real estate due to the demand of people wanting or needing to live in the downtown core. Toronto is the number one city in North America for new condominium construction and availability. The city has indeed earned its reputation as the top market for condominiums in North America with over 260 projects planned or already under construction. You can have confidence that investing in the Toronto market will be a smart decision. As an investor, you should be looking for positive cash flow properties and the GTA is a good place to look. With the University of Toronto, Ryerson University and York University being the 3 main campuses in the city, rentals are in high demand. Young people seeking a downtown lifestyle, empty nesters downsizing and people tired of commuting, make Toronto extremely popular and a perfect place to invest.
Mississauga is also ranked as one of the TOP cities to invest in real estate. It is one of the fastest growing cities in Ontario, with thousands of companies, ranging from corporate head offices to small retail businesses. The city stands as an economic leader in both the Province of Ontario and the country as a whole. With a growing population of over 700,000 and over $30 billion GDP, Mississauga is the third largest economy in Ontario and sixth largest in Canada. Mississauga is known for its growing population base, community diversity and talented labour force. The Mississauga UofT Campus, Hazel McCallion Sheridan College, the Living Arts Centre, the International Centre and Mississauga's Celebration Square is attracting many people needing the convenience.
Top 5 Reasons to Invest in Real Estate
Anyone can invest in real estate and now is the best time. Canada has been ranked one of the top countries to invest in real estate; the GTA being the focus. Look at the top reasons to invest in real estate.
1. Cash Flow
Whether you buy with all cash or use today's favorable financing with a low mortgage payment, positive monthly cash flow will occur when the monthly debt is subtracted from the monthly rent; giving you a monthly income from your real estate investment.
2. Appreciation
Appreciation is the increase in the property's value, which generally occurs over time and can be increased by investors who add value to the property through repairs and enhancements. This is also a way to create equity in the property.
3. Tax Benefits
An investor can usually claim the interest portion of his monthly mortgage payment as a tax deduction.
4. Leverage
Leverage is a powerful reason for investing in real estate. If an investor used 100% cash to acquire a house worth $100,000, and the house increased in value by $5,000 in one year, then the investor made a return of 5% (assuming no other costs in this case
5. Retirement
Have someone pay your mortgage for you and you may find yourself mortgage free in no time. This is a great way to save for your future retirement for you and your family.
Alaa Yousif Real Estate Broker
RE/MAX Realty Specialists Inc., Brokerage
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THERE ARE MANY PROS IN BUYING COMMERCIAL REAL ESTATE OVER RESIDENTIAL PROPERTY.
WHY YOU SHOULD INVEST IN COMMERCIAL REAL ESTATE
Income potential
The best reason to invest in commercial over residential rentals is the earning potential. Commercial properties generally have an annual return off the purchase price between 6% and 12%, depending on the area, which is a much higher range than typically exists for single family home properties (1% to 4% at best).
Professional relationships
Small business owners generally take pride in their businesses and want to protect their livelihood. Owners of commercial properties are usually not individuals, and operate the property as a business. As such, the landlord and tenant have more of a business-to-business customer relationship, which helps keep interactions professional and courteous.
Public eye
Retail tenants have an interest in maintaining their store and storefront, because if they don't, it will affect their business. As a result, commercial tenants and property owner interests are aligned, which helps the owner maintain and improve the quality of the property, and ultimately, the value of their investment.
Limited hours of operation
Businesses usually go home at night. In other words, you work when they work. Barring emergency calls at night for break-ins or fire alarms, you should be able to rest at night without having to worry about receiving a midnight call because a tenant wants repairs or has lost a key. For commercial properties it is also more likely you will have an alarm monitoring service so that if anything does happen at night, your alarm company will notify the proper authorities.
More objective price evaluations
It's often easier to evaluate the property prices of commercial property because you can request the current owner's income statement and determine what the price should be based on that. The asking price should be set at a price where an investor can earn the area's prevailing cap rate for the commercial property type they are looking at (retail, office, industrial, etc.).
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