As the housing market continues to climb, personal investors are increasingly eyeing-up the growing opportunities that sit in real estate, and more and more, are moving towards investing beyond their personal property.
Investment experts say it is a smart idea to include a decent mix of real estate in your portfolio, apart from your own home.
“A home has an emotional attachment and you can’t short your home,” says Derek Warren, a portfolio manager at Morguard Financial Corp. “The average investor needs a more diversified portfolio and real estate in general continues to be a hot sector.”
Denis Vranich, real estate developer from Hamilton, Ontario, agrees. “It is a good idea to diversify within asset classes. There are a lot of people who are turning to real estate focused equities and private funds, including crowdsourcing opportunities,” said Denis Vranich.
Real estate has always been an appealing investment option, as it is often perceived as more resilient or less risky than other avenues.
The TD Investor Insights Index reported that 74 per cent of respondents from a recent survey viewed their home as a real estate investment. Thirty-two per cent bought other properties as investments and eight per cent had picked up mortgage backed securities.
Randy Dyck, a real estate investor from British Columbia’s Fraser Valley, says he has no regrets about branching into real estate investing over 20 years ago.
“It gives me this security of a hard asset that’s worth something substantial and provides monthly income,” said Dyck.
To add to the positive news, demand for multi-family residences has been booming in cities across Canada and development of these properties can’t keep up.
According to Business Market Trends, there were 15,488 multi residential properties in Ontario in 2016 and property values continue to increase.
Experienced investors say multi-family properties also create reliable, long-term income and the ability to oversee what you are investing in.
“Finding the right tenant can be a challenge,” said Dyck. “But, when I do find the right tenant, that tenant can be there for 10 years.”
Grant Cardone, entrepreneur and New York Times bestselling author, says that if you are looking to get into real estate investing, definitely avoid single family residences.
“In my opinion, real estate is the best way to grow wealth. But, if you want to get involved in real estate, start with a minimum of sixteen units, avoid condos, and only buy multi-units at one address,” he said.