Start your real estate investment is a lot easier than you think. First step, own a house.
Buy a house for yourself or your family is often considered one of the biggest investments in our life. It is indeed so, and it is also one of the best investments in your lifetime.
Despite the double-digital interest rate (1981), domestic market bubble (1989) and global financial crisis (2009), house prices in Canada have been rising steadily for the past few decades. In a rough calculation, house price doubles every 10 years since 70s. In 1980, a single detached house was selling for $50,000 in Toronto, today they are close to $500,000. At the end of each decade, house prices reach to a new historically high level.
The benefits of owning a house cannot be emphasized enough:
- It is the easiest way to participate into real estate investment without extra time or effort. You can still work your 9-5 job, live your life, and meanwhile invested.
- You will reap the benefit of house value appreciation in the long run. Remember at the end of the day, the simple truth is that people who rent all their life left with nothing; people who own the house left with a house. Regardless it’s small or large, it’s an asset you can either cash on, or pass it on.
- You are forced to use the best investment tool: leverage. Some people are afraid of debt. Regardless you hate it or love it, you are forced to borrow a mortgage and pay it down every month. In the term of real estate investment, this is called OPM – Other People’s Money. Given the historical low level of interest rate in Canadian history, this is the best money you should borrow to make money work for you.
If you already own a house, chances are you are one of the 70% of populations who already own their house. Canadian home ownership rate inches higher, from 68.4% in 2006 census to over 70% in 2012 census.
If you are not yet own a house or still thinking about yes or no, it is time to take action now.