Real estate is a big business, and it’s not reserved solely for agents and large corporations. You can also invest in Canadian real estate by buying and then renting out the property, or you can buy low-priced fixer-uppers and then flip them.
There are plenty of good reasons why real estate is such a wise investment for even ordinary people. Here are some of the more compelling reasons that you have to consider:
- You get much higher returns. This is especially true for real estate in Canada, as numerous homes in many cities increase in value by 10% year after year. After 7 years, the value of your home can actually double in cities like Montreal, Toronto, and Vancouver.
That’s also possible in the stock market, but only if you’re really lucky. During the first decade of the 2000s, the return was actually in the negative. This period is notorious for the returns of 2008, when the average return on stocks was negative 37%.
Of course, savings accounts don’t compare to real estate as well. You’re lucky if you can find an account that earns 2% per year. On average, you’re likely to get 0.6%.
- The market is also much less volatile. While like any other industry the real estate market ebbs and flows, the changes and fluctuations aren’t as dramatic as what you’ll get in stocks. That’s especially true of the tech stocks like Google, Facebook, and Tesla, which may lose or gain billions in value seemingly overnight. For real estate, the changes are much more gradual.
- You get a tangible asset. This means you have something real to possess, unlike stocks, currency, or virtual currency like Bitcoin. So if you have land, you can use it for anything you want, including building a home for your own use. This tangible asset is also easy enough to protect with insurance.
- The demand for land and homes will never go away. This is especially true in Canada. The population will increase, the new generation of adults is coming, and there will be more immigrants arriving on Canadian shores. That means you have more people who will need homes and places to do business. Since the amount of land isn’t infinite, the value of your property will tend to increase as the supply remains the same and the demand for land and homes rises.
- Experts aren’t really advocating that you give up on stocks and savings accounts. It’s just that you shouldn’t have all your financial eggs in one basket. You should also have some money invested in real estate, so that if your stock investments don’t pan out as you’ve planned then at least your real estate investments can still help maintain your wealth.
- It’s easy to make money on the side. You can buy a condo unit and then rent it out. Even if you own a house, you can rent out the house or even just a bedroom for tourists.
There was a time when the wealthiest people in society were the landowners. That may not be true nowadays, but the same principle holds. If you own real estate, then it’s much easier to protect the wealth you’ve gained.