3 Types of Real Estate Investment Properties for Beginner Investors

Dated: September 30 2019

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There is a general perception that only a small group of "elite" investors can profit from real estate investments. With the exception of malls, office buildings or luxury residences (preferred by the 1% of the population), there are plenty of options that are more realistic for every day investors.


1. Vacation Property. You may crave a villa near the beach in Tofino or a house in a ski resort such as Whistler, but you don't think you can afford it. Well, the good news is that most likely you can, and at the same time, earn rental income when you're not in your vacation property. Sounds good, right?

Pros: Renting a property can offset the cost of maintaining it. There are numerous sites such as Craigslist, Kijiji, AirBnB where you can post your ad and reach out to candidate tourists. You receive passive income that you do not have to work for physically.

Cons: Keep in mind that you have to pay a significant amount for downpayment. In addition to the price of the property and the transfer fees, you will also be expected to pay the annual maintenance and perhaps strata fees. There is also taxation on the income made from rental properties. Finally, you have to get used to the idea that strangers will live in your property and use your appliances.

2. Single family house.

Buying a detached house as a whole is a larger investment than buying a vacation property. The rewards can be worth the effort. Many investors who bought single-family homes near major Canadian cities are making constant profit, because Canada is a safe haven for investors. The Canadian dollar is strong and the political environment is stable. Another factor to consider is that Vancouver is renters city and the population growth expected to rise by another 2.5 Million people in the Greater Vancouver Area.

Pros: There is always a demand for single family dwellings. The appreciation usually is greater than that of other investment properties and generally it is easier to find a buyer (keep in mind you can sell to the current tenant or potential investor who is interested in keeping the current tenants) if you decide you no longer want to own the property.

Cons: Aside from the higher purchasing costs, you will only rely on one single source of revenue - your tenant. This means that if the tenant moves out of the property, you must have sufficient funds to cover the costs of maintenance and your mortgage until a new tenant is found.

3. Investing in Multi-Family

If you have larger accumulated capital to invest, why not invest it in a multi-family building? Three or four apartments can be purchased with existing financing and are a good option for people who plan to live in one of them and rent out to future neighbours.

Pros: This investment provides enough revenue streams so that if one apartment remains vacant, you can count on renting out the rest. This will offset the cost of covering your mortgage and maintenance fees while looking for a new tenant.

Cons: I Hope you have a wrench, pliers and a screwdriver. Your income in this case actually comes from actively managing the building so expect an increase in the number of calls for a running toilet in the middle of the night, a burned lightbulb or problems with the heater.

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Momo Kanev

Momo Kanev, exemplifies integrity, energy, hard work and creativity in every detail of the real estate transaction process. Momo, has over 10 years of experience in the construction industry. He speci....

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