There are many ways to invest in real estate.
Property investments have had excellent returns and there are indicators that this trend will continue.
Karim Virani, of Virani Real Estate Advisors, joined CTV Morning Live to share five great ways people can invest.
Each of these options have their own dynamics, capital requirements and risk levels.
Principal Residence: This is the most popular method of real estate investing. This allows people to pay off their mortgage and grow their wealth. This options allows people to avoid paying rent to a landlord, which would mean not accruing equity in the property they are living in.
Rental Property: Becoming a landlord is a popular way to generate income and build wealth. People can become landlords at a residential or commercial property. Virani explained that the return potential is strong and allows people to use it as leverage to purchase additional property. People should be aware that there are serious considerations to be had before investing in a rental property. Most lenders require a significant percentage down for an investment property loan. There also is an element of risk when it comes to vacancies, property upkeep, and unexpected repairs. It is wise for landlords to save several months worth of expenses in reserves.
Buying, Fixing and Flipping: House flipping is best for people who have significant experience in real estate valuation, marketing and renovation. Virani warns that if a fixer upper has serious structural defects, costs can increase dramatically.
Investing in Real Estate Stocks: Real Estate Investment Trusts are essentially dividend-paying stocks. This method is a more hands-off way to make money in real estate. They can be bought quite easily with minimal capital.
Adding A Rental To Existing Property: There are many short and long term rental options where extra income can be made. This method can be as simple as renting out a spare bedroom on sites like AirBNB and VRBO. Another option is renovating a portion of the home and turning it into a multi-unit residential property. People need to make sure their accomodation meets municipal bylaws and strata regulations.
To learn more about real estate investing check out the full video on CTV Morning Live.