Home Or Investment?
Unlike other investments, which can be really volatile, the increase in the value of homes is relatively steady. The average house price in Canada increased every year for nine years preceding 2008, and because the real estate market is cyclical, it will rise again.
People tend to invest their extra money in real estate and the stock market, both of which have their peaks and valleys. Of these two popular investments, real estate tends to dip for less time than it peaks; there are longer periods of sustained growth, shorter valleys, and over time, the trend is always upward. That’s why personally, We’ve chosen to invest in real estate! We’re proud and privileged to own our home and several other Central Elgin properties.
Here’s what you need to know about investing in real estate:
If you plan to live in your property for more than five years, you’re in a great position. You will have the benefit of being able to ‘time the market’ and sell when it’s to your advantage. In this case, your home is also a lot more than a tangible investment in your future – it’s a place for you and your family to put down stable roots in the community, while enjoying and personalizing your living space.
If you’ve bought your property mainly to generate rental income, and do not ‘have’ to sell it at any specified time, you are similarly in a good position to gauge when prices have hit their peak you can sell at the height of the sellers’ market, and in the meantime, all that rental income is paying for the mortgage, repairs, and upkeep.
South Western Ontario’s housing market is known as an ‘end-user’ market because the majority of homes are purchased with the intention of being owner-occupied. However, some buyers do purchase investment property – often pre-completion condos, vacant land or homes in disrepair with the intention of making improvements and then selling. ‘Flipping’ properties requires skill, business acumen and a great deal of planning, and because the intention is usually to re-sell the property within a shorter period of time – you have to time it right.
Remember, there are other important financial benefits to owning property: