Today many Canadians are looking for ways to increase their income every month and save for their retirement fund. That’s why many people are interested in real estate as a revenue stream. If you live in a province such as Ontario, you will find different markets to choose from. There will be cities with high prices such as Toronto or more affordable markets like Barrie or Thunder Bay.

The key here is to know how to invest in real estate in Ontario. That’s why we have created a list of strategies you can use.

The reason real estate investment in Ontario is trending nowadays is thanks to the many benefits it offers. For instance, one of the advantages is that the value of the property you buy will increase throughout the years, as has been the case throughout many parts of Toronto.

This means that when you decide to sell, you will get even further profits. Also, investing in rental property in Ontario can generate a regular cash flow that you can start saving up.

The best thing about real estate investing in Ontario is that you don’t have to be an expert. You will only need some basic knowledge about how the market works. Plus, some strategies that fit your financial status and time availability. In this regard, there are many ways in which you can accomplish this. Below, we will focus on the most common ones.

How to Invest in Real Estate in Ontario

Before you jump into the waters and start your real estate investment in Ontario, you should consider a couple of factors. First, keep in mind that even though real estate will bring you immense profits, this might not happen immediately.

Also, make sure you are not adding more debt than you can handle. In case you can afford this new adventure, here are some ways to get you started.

1. Buy and Hold

If you want to take baby steps and reduce the risk when it comes to an investment property, Ontario offers you a great way, “Buy and Hold.”

The key here is purchasing a house and holding it for a long time while its value increases.

After you buy the property, you can have tenants. Every month they pay the rent, the money will contribute towards paying your mortgage. That way, once you decide to sell the property, it will be mortgage-free. If you want this to work, you need to make sure that the price of the rent covers all the expenses. Many investors choose this strategy for real estate investment in Ontario since it is the most simple one.

There are a couple of factors that you need to keep in mind if you want to use the “Buy and Hold” strategy as another source of income. First, be patient, a rental property is a great long-term investment if you wait. Also, make sure you save at least 20 percent of the purchasing price for the down payment (learn more about requirements in Ontario here).

2. House Flipping

If you ask an expert how to invest in real estate in Ontario, most of them will tell you that the best option is flipping a house. The reason why this strategy has become very popular is that it can leave you many profits when done well. Plus, several Canadian shows are focused on this real estate strategy. When you decide to flip a house, first you need to find a property that is undervalued. This can happen when homes need major renovations or upgrades. Also, try to purchase a property that is in a good neighbourhood since this will ensure you have potential customers when the house is ready. 

Check out our communities in the Greater Toronto Area, all of which are already prime locations poised to grow significantly over the next few years.

Finding a house to flip can take several months, that’s why you need to be patient. Once you have a good property, is when the real work starts. Doing all the renovations yourself can be risky if you have no previous experience in the field. Thankfully, you always have the option of hiring a contractor. If you want these real estate investing in Ontario to work, you need to keep a budget. If you are successful at house flipping when you sell the house, the amount will be higher than what you invested.

3. The Hybrid Method

If you like the idea of an investment property, Ontario offers an option that combines the strategies above, The Hybrid. As explained above, you will need to find a property that is under the market value. Once you purchase it, then you will have to flip it. When the house is ready, you will hold it. This is a great way of investing in rental property in Ontario since you will accumulate tons of equity with the renovations. 

The key to this real estate investing in Ontario is calculating all your costs beforehand. Also, you might have to get creative with your financing options since it could be hard to find a mortgage for the house. The location of the property will be crucial. Check out neighbourhoods where there is access to public transportation, quality schools, and malls nearby.

4. Investment Partnership

In case you are thinking about purchasing an investment property in Ontario, but you don’t have the funds or knowledge, you can have a partner. This option is often known as a joint venture, where you will find another investor that shares your same goals. Often people choose somebody that has experience with this type of investment. Since this will be an arrangement where the money is involved, it will be better to have a previously written agreement. In there, you need to state the following:

  1. Spell out how you will share the costs and take the decisions to advance the project. 
  2. Write all the requirements that will help you choose the tenants. Also, you need to decide who will be in contact with them.
  3. What aspects will determine when you would sell the project. 

Keep in mind, that the most important aspect of the partnership will be how much percentage of the profits you will get. Sit down with your partner and have this conversation before you start looking into new properties.