Investing in real estate may seem like a daunting task, since there are countless options available to you at any given moment. If you’re feeling overwhelmed, don’t worry – we’re going to break it all down for you!
Where to begin?
If you’re looking to invest, there are three main considerations every buyer should look at: location, style of property, and current market conditions. However, when we meet with new clients, we also take great care to cover a fourth metric: which style of investment fits their knowledge, budget, and profile?
Types of real estate investments
If you’re looking for a steady income stream, multi-family homes or apartments can be a great choice. Given the strong demand for rental properties compounded by increasing expenses (such as owning property) and high levels of immigration to a city like Montreal, you can expect a consistent return on your investment.
Commercial real estate, such as office buildings or retail spaces, can also be a strong choice. While this type of real estate typically offers higher returns, it also comes with a higher level of risk. As illustrated by the pandemic, office and retail space can be a bit volatile and inconsistent.
However, for people with substantial investment budgets, a property in a great location with triple-A tenants like banks or established franchises like McDonald’s can be one of the most stable investments you can make.
Industrial real estate, such as warehouses or distribution centers, can also be a great option. This type of real estate is often in high demand due to the growth of e-commerce and the need for storage and distribution facilities. In fact, we would say this is actually the hottest real estate sector at the moment.
These types of investments involve dealing with business professionals, which usually entails more paperwork and negotiation, but it can be extremely profitable when you find the right tenants, especially if you sign a triple net lease – a topic we’ll cover in a future blog.
It’s important to note that the type of real estate you invest in will also depend on your personal financial goals and risk tolerance. Before making any investment, it’s crucial to conduct thorough research and seek advice from trusted professionals.
Who should you turn to for advice?
The first person you should add to your advisory team is a real estate investment professional – like a broker – so you can figure out which strategies best suit your profile.
You may need months or even years to get yourself lined up for a first investment, but the sooner you get an idea of the strategy you should employ, the sooner you can take that first step towards financial freedom.
Want to team up with the best? The LJ Realties team knows real estate investing inside and out. Give us a shout via phone or email, and we’ll be happy to kick off a conversation about your investing strategy.