When we discuss real estate investment, most people wonder whether they can own a residence as the value could increase after a few years. There are several methods to invest in real estate. However, you have to research and find out the best places to invest in real estate as per your budget levels. Each method consists of a different kind of risk. If you are making any investment, you have to perform with due diligence and ensure that you are spending wisely. Before planning to invest, check the various ways to invest that we have explained as a full list here.
Certain types of real estate investment are active (house flipping, owning a rental asset, owning a principal residence, etc.), and some are passive (mutual funds and REITs). There is a vast difference between real estate investment and stocks market investment. If you are selecting real estate, you have to perform for a specific reason. Here are some of the best real estate approaches to consider:
Purchasing primary or principal residences:
One of the traditional approaches to investing in realty is buying a primary or principal residence. If you are purchasing a primary residence, it means you are buying a home to live in, and you are purchasing a long time investment. When renting, you would be paying a certain sum as rent to your landlord. But when you purchase, you would pay the rental amount as the mortgage for your own property. It will develop your net worth, and thus you can own the entire house after a few years.
If you wish to purchase a residence, you have to first save a lump sum amount as a down payment. The first time house buyers can draw about $35,000 for this purpose. If you are not buying a house for the first time, then you can save through TFSA for the down payment.
When purchasing a residence, you have to consider certain important factors such as a home in the decent locality, easy access to highways and public transit, the area with low crime activities, a school with good rating and reputation and close vicinity to convenient amenities such as parks, shopping and restaurants.
Invest in rent yielding properties:
If you are finding house flipping or own house purchasing a bit risky, you can plan to invest in a rent yielding property. A rental property is an excellent active investment. If needed, you can manage on your own, or you can outsource to a property manager, where they would take care of the property and tenants for you. Just ensure to fix a decent rent for your tenants as you have to pay for the property manager and also for a mortgage (if you have purchased by taking a loan).
Though the mortgage price may look high for properties with rental income, it offers an excellent chance to earn decent money when the house appreciates after a few years along with generating good rental income. It is almost like your primary residence. So, ensure to purchase in an attractive and decent locality.