With the recent changes in rental laws and Airbnb’s new regulations surrounding renting out your own property, many people may be re-thinking the profitability of their investment property or purchasing an investment property at all. But with some careful planning and proper understanding of owning an investment, your property has many benefits – one of which is that it can still turn you a profit.
Real estate is a less volatile investment than the stock market. While of course, the real estate market can fluctuate, it is usually more predictable than that of the stock market, and people will always need a place to, live. This means, that even if property prices drop if you continue to rent your property and have enough money coming in, you will be able to wait it out without hurting your profits. In this scenario, the decreased value is only impactful if you sell the property at that time.
When it comes to managing an investment portfolio, composed of stocks, bonds, and funds it can be overwhelming to understand all of it, let alone keep on top of it all and make sure you are not losing money. In fact, that’s why people hire an investment banker – and pay the fees as a result. When it comes to property investment, however, how it works, the money coming in, and the money going out, is much more straightforward, and in the end, is likely something you can manage yourself. This results in money staying in your pocket, and you being the one to oversee how the money comes and goes.
As an investment property owner, you will get to take advantage of many of the benefits that come with owning a property and use them to help you out. For example, currently the Toronto rental rates are trending upward, as is population growth, and these are allowing rental prices (and your cash flow) to be higher. Likewise, there are benefits such as offsetting much of the cost of your property via your income tax return. While these things will always be balanced by other cons in the market (read: changed rental regulations), if you do your homework and use your resources, you will likely benefit in the end.
While any investment comes with risks of course, in many ways, property is a less risky choice. With the right elements in place and an educated understanding of rental property investments, your property can indeed end up being a profitable preference.