Real estate continues to be one of the most stable and reliable ways to get a strong return on your investment in Canada, but all properties are not created equal. Here are some questions to ask yourself to help you tell the difference between a dubious purchase and a great investment opportunity.
1. Is the population increasing? When investing in real estate, the rules of supply and demand are essential. If you are investing in a city like Niagara Falls where the population is steadily growing, you can be confident that your pool of prospective tenants is also growing. However, if you invest in a community with a declining population you may have a harder time finding tenants.
2. Is the community accessible? When buying properties that are not located in a major city like Toronto, you are sure to find more affordable property prices. Nonetheless, you have to ensure that the community you are investing in has easy access to major highways, airports, and other forms of transportation. For instance, the Niagara region’s proximity to major highways, airports, and the US border makes it a prime location for investment, but a remote community in Northern Ontario is a far bigger challenge.
3. What is the rate of employment? When thinking about investing in a particular community, do your research. Check the most recent employment rates and see whether employment is rising or declining. More jobs means more prospective tenants who can afford to rent your property and more prospective buyers when you decide to sell.
4. Is the community investing in public infrastructure? If a community is building new schools, hospitals, and community centers, it means that the government is pouring money into the infrastructure. That is good news for real estate investors.
5. Is the private sector growing? New businesses moving into the community, department stores opening, busy malls, and plazas filling up are all great signs for real estate investment. Private businesses -- and big national and international retailers in particular --like to invest in vibrant communities with a lot of potential. These companies spend a lot of money on researching communities that will be best suited for their businesses, so if they are investing the potential is there.
If you can answer all of these questions in the affirmative, chances are that the community you are thinking about investing in is a suitable one. As long as you do your research and invest wisely, you will reap impressive financial rewards in the long term.
For more information about real estate investment in the Niagara region and beyond, feel free to call Barbara Grumme at 905-356-9100.