The best decision my wife and I made was to start real estate investing in Ontario.
The first property I purchased was in Brampton that I wanted to flip in 2007. Things didn’t quite work out as planned and I ended losing about $700o at the end of the deal. But I moved on, learned from my mistakes and bought another one.
We bought our 2nd property South of the border, a few hours drive in New York state. The prices were much better there so we thought let’s buy as it cash flows really well. We were attracted to this market as we were buying properties that were really cheap. Lesson learned was not to buy just because it is cheap, it is cheap for a reason. Although we don’t regret buying in USA, I am glad we went back to real estate investing in Ontario Canada.
Real Estate Investing in Ontario isn’t just about Cash Flow
I think its important for those looking at buying their first rental property to understand that not all of the wealth created from real estate ownership is realized in cash flow. Although cash flow is great, it is not the only reason you invest in real estate. So when you look at property that has a cap rate of say of 5% that is not all the profit in the property. Some of the ‘unrealized’ gain will come in the form of capital appreciation. The appreciation is what adds up over time. There is no guarantee of appreciation, but historically property prices have a baseline for appreciation growth as long as they are in good neighborhoods. This is the primary reason we went back to real estate investing in Ontario.
Ontario’s market has a stable and diverse economy, good jobs, population growth, GDP growth, immigration, good infrastructure and that is why we love real estate in Ontario. Due to this market, we have steady appreciation and good quality tenants.
Speaking of tenants, real estate investing is not a quick flip profit type of business. Sure you can buy fix and flip it and make a decent profit doing this; however you have to keep repeating this process in order for you to get paid. The real money is made over time by holding on to the property and having it rented to quality tenants. Every single month, your loan is getting paid down.
Why Real Estate Investing in Ontario is better than Stock and Bonds
We chose real estate investing in Ontario for those 2 other reasons (Mortgage pay down and capital appreciation) that we didn’t have before. Your property does have to Cash flow in order for you to keep growing. In our opinion and from our experience, owning real estate is definitely worth the hassle and headaches. It allows you to take full control over your finances and not rely on the stock market or government to help you in your retirement. Sure there is work involved, however the payoff is well worth it. The path is simple but not easy.
So until next time, happy Canadian Real Estate Investing.
Jose Jafferji, REIA