Real estate investment is considered to be one of the best ways to utilize your money to grow your wealth in the long term. In fact, to invest in real estate has become a norm of almost everyone these days – from business tycoons to simple down-to-earth people are all in search of any real estate investment opportunity so they may be able to generate some extra money by the time they retire.

Since real estate investment has become too expensive lately, and rate of investment in properties has gone higher than ever in the past decades, many people think that now this method of investment has gone out of hand or they are too late and will never be able to source capital for making such an investment.

But that’s not it. There’s some good news for all such people.

There are several ways to source capital to invest in real estate, and also grow in the real estate sector.

PURCHASING A PRIMARY RESIDENCE

Best of all options, definitely, is using your own private capital to invest in real estate. This does not always mean that you need hard cash to make an investment.

Let’s say, you already possess ownership of any property, or the house you are living in, is your own – then you can seek advantage of your existing asset. To come up with some immediate profit, you can rent out a part or entire of the space available to you. Many people even tend to rent out only a single room to any individual like a college student, to generate a rental fee on a monthly basis. This amount can be used to pay utility bills for the entire space and hence alleviate some of your expenses.

You can also consider investing in repairs and maintenance to make your rental space appear more appealing to the prospective tenant. Also, you can provide additional services such as storage, laundry facilities, security system or car parking for which you can charge higher and thereby generate a better cashflow through rental fee. This cashflow can be, thereby, utilized to make further investments in real estate such as pay down your original mortgage faster to make capital available for your next investment. This type of investing is also called house hacking.

BUYING AN INVESTMENT PROPERTY AS PRIMARY RESIDENCE

Many investors use different strategies to purchase a place of residence as quickly as possible and may be able to rent out partially such as basement apartments while others focus on buying properties with multiple units as their primary residence. Depending upon the capital amount required, these multi-family properties usually pay for themselves through the rent collected from other units while the owner can live in one portion.

This grows the equity of your property and you can live there for almost rent free because rental income can be used to pay utility bills, municipal charges, any taxes etc.

ACQUIRING PROPERTIES AS PART OF JOINT VENTURE

Investors can also find partners who can source out money and properties along with you to invest in real estate. Buying an investment property is not easy and with a partner you both can share costs and risks associated with the acquisition and divide the profits. This helps investors buy larger properties that they would’ve been able to on their own and helps generate better returns and pooling of resources.

START A SIDE HUSTLE

That’s definitely an option everybody is looking into; since a business or any source of income on the side of your primary business can leave you with extra cash each month. It can be freelancing, online buying/selling or consultation – but even a little bit of cash collected from the side can result in generating savings and financial stability in the long run. These savings can be later on used to invest in real-estate property deals.

RRSP SAVINGS TO INVEST IN PROPERTY

Many people use funds from their Registered Retirement Savings Plan (RRSP) to make investments such as investing in 2nd mortgages and investing in Real Estate Income Trusts. The government of Canada also has the Home Buyer’s Plan (HBP), through which any one can use their RRSP savings to use their down payment and fulfil their dream of home ownership. RRSP Investments are Income Tax exempt and you can withdraw (up to $35000) from the account to use towards your down payment. Your spouse or legal partner can also withdraw up to the same amount. There are several rules and regulations regarding using the RRSP savings to make use of the HBP, we will discuss those in the next articles to come.

REFINANCE YOUR EXISTING PROPERTY

Another way to gain capital is through refinancing your property. Refinancing refers to restarting with a new mortgage with a higher principal and increasing your liability. There are several rules and regulations associated with refinancing your property in Canada. With refinancing, you also have the option to get a new mortgage rate, or change the length of the mortgage or change the lender. It allows the owner to pull out equity from the property, and thereby, gain access to capital for reinvestment. This is also called a BRRR (Buy, Renovated, Rent and Refinance) Strategy which can be used to acquire additional properties as equity is built up in properties.

SELLING YOUR EXISTING ASSETS TO ACQUIRE NEW ASSETS

There’s nothing like fulfilling the idea of acquiring a flagship investment property or attaining ownership of an asset that is really profitable in the long term. So another option that naturally comes in mind is selling your existing asset (maybe something you possess that is not much profitable) to invest in a new venture.

Your existing asset can be shares, any extra vehicles or even your own home where you are living right now. Selling your home will leave you with hard cash that can be used to invest in another much better opportunity or real estate. 

PARTNERING WITH US – HEYADDY.COM

Sourcing capital for real estate investment can be tough, and so can be the process of purchasing, brokerage and transaction management especially when trends in the market shifting so rapidly.

If you cannot make your way through property management, you lack the tips and tricks of real estate purchase, or you require some sound advice you can always partner with us.

We offer not only investment services of the highest calibre, but our team of highly trained and experienced staff will attempt to maximize each possible investment option for you. Well versed in current market trends and legal matters associated with real estate investment, our staff is always eager to serve our clients. Book your consultation right away with us and obtain the best professional services in the field.