Please forward this error screen to 94. Please forward this error screen to 108. Purchasing and investing in real estate has always been attractive for those that are looking to generate additional income and benefit from the wealth created with increases in property values over operating vs investing vs financing. Is investing in real estate right for you?
Diversification is key to anyone’s investment portfolio whether you are talking about mutual funds, TFSA’s, stocks, bonds, RESP’s, RRSP’s etc. Diversification helps balance risk and provides a level of confidence that your investments are still going to be there when you are ready to liquidate them, such as at retirement etc. Some would consider adding real estate, other than their principal home, to their portfolio to ensure full diversification. This return is generated from a combination of monthly income and property value increases.
The monthly income is generated by taking the rent collected from tenant and then deducting all the expenses. To ensure that there is a positive cash flow, smart real estate investors work with a mortgage expert and real estate agent that can assist with the analysis. Equity is built in the property by way of appreciation of value over time as well as with each mortgage payment. With mortgage interest rates at record lows and an abundance of potential tenants in many areas, there is a high demand for real estate investors to take the plunge. Essentially, as you pay down the principal of a mortgage, you’re reducing debt and building equity.