Whether or not to invest your hard earned money in real estate is a very personal question. Not everyone enjoys being a landlord or holding a mortgage and when it comes down to it investing in real estate can require work than investing in a GIC for instance.
Having said this however, investing in Vancouver real estate can be an extremely rewarding investment. Owing your own Vancouver condo or Vancouver home and renting it out to others, offers a host of potential challenges and rewards both monetary and otherwise.
For most people, an investment in real estate comes with a mortgage. In one sense this means that you are indebted to a bank, however you will also be building equity through time.
Because banks are much more likely to lend financing for real estate investments than most other investments, investing in real estate can be easier. Real estate tends to be less volatile and more secure than other investments which is why banks are less hesitant about lending money for this sort of investment.
Moreover, history has shown that real estate values rarely decline significantly overnight. While it does happen in certain areas or during certain crisis periods, generally real estate investments are secure in the longer term.
One thing to be aware of when deciding whether or not to invest in a home or condo, is the associated costs that come along with home ownership. First off, commissions, fees for attorneys, and the costs of selling and buying a property can come as a shock to first time buyers. Likewise, property taxes, utility and other maintenance charges that inevitably arise should be accounted for as much as possible beforehand.
Another component of a decision to invest in real estate should be an analysis of cash flow. When buying a property to rent out, the rent should cover the cost of the mortgage, taxes, maintenance expenses and any other monthly or yearly expenses you will see.
Finally, with a real estate investment, you will also have to be willing to spare the time that dealing with tenants and so forth requires. If you don’t have the extra time to deal with issues that may arise, maintenance problems, searching for new tenants etc., than a real estate investment probably isn’t for you.
Like any investment, real estate comes with both risks and rewards. Nevertheless by putting in the time and effort to research your investment and speak with those knowledgeable about the market, you can come to a sound and well thought out decision.