Between the rise in first-time homebuyers and a growing number of people interested in moving to Canada, the Niagara real estate market is hot. 

If you are thinking about investing in real estate, now may be a great time to make your move! Let’s explore the different real estate investment options and which ones are suitable for you to invest in.

There are several ways you can invest in real estate, yet the most common one is purchasing your primary residence. One of the reasons why this remains the most popular type of investment is because you are exempt from paying capital gains tax on any profits you earn from selling your primary home. 

Homes in St. Catharines and throughout the Niagara region have seen a significant value increase over the last decade. Investments in infrastructure like GO Transit services have spurred new development across the region. And with many people in urban areas like Toronto looking for a more small-town lifestyle, our region is an ideal place for real estate investment.

Rental properties are another type of investment that can provide you with a steady income flow. Long-term rentals are a great option because you’ll receive monthly payments from tenants. Or, if you prefer more flexibility, you can turn your property into a short-term rental. A vacation property, such as a cottage, can allow you to enjoy your investment too.

If you are considering a rental property, keep in mind the costs associated with this type of investment. Mortgage rates on rental properties tend to be more expensive compared to primary mortgages. And if you decide to hire a property manager to maintain your property, this cost can affect the profit you gain from your investment. 

If you have more of a “roll-up-the-sleeves” personality, investing in a house renovation project may be another option. Purchasing a property to renovate and resell (what we typically know as “house flipping”) can generate a profit if you have the right knowledge and skills. And it can be rewarding to transform a home into something a new buyer will love.

But there’s also a lot to consider with this type of investment, including whether the property will yield a good profit after all the renovations. Our team recommends speaking with an experienced REALTOR® who knows the area well, so that you can evaluate all of the factors involved. Also keep in mind that you will pay capital gains tax if this is your secondary property, where half the profit you make will be subject to tax.

Now, if maintaining or renovating a property is less than appealing to you, you may want to explore Real Estate Investment Trusts or REITs. With this investment, you purchase publicly traded shares of a company that owns multiple commercial properties. You receive monthly payouts for your investments without having to physically maintain the properties themselves.

If you have plans to buy an investment property, our McGarr Realty team would be happy to show you all of the options available to you! Our REALTORS® have extensive knowledge of Niagara real estate and upcoming developments in the region.

Call our office at 905-687-9229 in St. Catharines, or 905-468-9229 in Niagara-on-the-Lake. Or send us a message on our contact page, HERE.

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