Why Right Now is a Once in a Lifetime Opportunity to Get Double the Benefits with a Real Estate Investment - February 3, 2022
Ian Walterhouse
Thursday, February 3, 2022
Why Right Now is a Once in a Lifetime Opportunity to Get Double the Benefits with a Real Estate Investment
If you’ve ever thought about buying an investment property now is a once-in-a-lifetime opportunity. When buying a rental property, you always hope for strong rental demand coupled with a limited supply. That will maximize your returns both in the short term in terms of strong and predictable rental income (passive income) and in the long term with rising home values when you choose to sell. Rental property investments are in a win-win situation and especially so in 2022.
Supply is Low
Here’s why. In the fourth quarter of 2021, the total number of condo rental transactions amounted to 10,820 – down 13.9 per cent year-over-year. There were 16,972 units listed for rent – down by 48.9 per cent compared to Q4 2020.
“The lack of housing inventory is not just an issue for the ownership market in the Greater Toronto Area. After a relatively brief pandemic-induced blip in rental supply, available rental listings have declined. This has made it more difficult for would-be renters to find a place to live – essentially you can’t rent what isn’t available. By extension, the lack of inventory has also resulted in increased competition between renters, pushing average rents higher,” said TRREB President Kevin Crigger.
Demand is High
The average one-bedroom condo apartment rent was $2,099 in Q4 2021, representing a 13.7 per cent increase compared to the same period 2021. Over the same period, the average two-bedroom condo apartment rent increased 12.6 per cent to $2,763.
“Demand will increase as both immigration and temporary migration into the GTA picks up over the next year. Both sources of population growth result in more demand for rental accommodation. In the absence of a marked increase in the supply of rental units, expect average rents to trend further upward in 2022,” said TRREB Chief Market Analyst Jason Mercer.
Set It Up to Work for You
The demands of owning a rental property can look different depending on how you choose to set it up. There are many options available to landlords ranging from complete hands on (think fixing the toilet on the weekend after a call from the tenant) to hands off (think management company that handles all the headaches that might unfold while you own the property). There are also legal structures that can be put into place that allow you to benefit from tax incentives for landlords. For me, passive income is the most important part of the process for my real estate investments.
Bottom Line
If you’re thinking of making a real estate backed investment, now is the optimal time to buy a rental property. Let’s connect to discuss how you can set up an investment that will provide you with strong returns in both the short and long run.
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