Many believe that real estate is a secure way for wealthier individuals to invest their money. In recent years, Canadians have seen high returns on property investments close to urban areas, particularly Toronto and Vancouver. However, there are a few things would-be investors should know before dipping their toes into Ontario real estate.
Real estate investment is often less simple than it may seem. Some people fail to account for tax implications and maintenance costs associated with their new property. Others may be caught off guard by changes in the real estate market, which may not always go their way. Experts caution that, while the extreme appreciation that has been seen across Canada in recent decades might be attractive, doing research and accounting for hidden hosts is a must.
One of the challenges of real estate as an investment is that it is illiquid and indivisible. This means that it is not at all flexible as an investment, and selling a property in order to profit from real estate can be time-consuming and expensive itself. Additionally, house flippers who buy, renovate and sell homes within a few years may also need to apply HST to the transaction, since it will then be considered a business by the Canada Revenue Agency.
Tax efficiency is of prime importance when investing in real estate, as is following Ontario real estate laws and paying close attention to market trends. Working with experts in the field can help someone be more successful in such investments. A person worth having on one’s side in these efforts is a lawyer, who can detail the legal steps needed and ensure investments follow regulations.