Top 5 Canadian Real Estate Investing Strategies

Before we talk about Canadian Real Estate Investing Strategies, I will give you a little background on how I got here!  My wife and I first started investing in real estate before we were even married.  In fact, we used to go on road trips to check our properties in the place of ‘real’ dates!  At that time, we were young and just starting out on our real estate investing journey.

We started investing in Rochester, USA, and would take weekly road trips across the border to look after our properties.  But soon enough we started to ask ourselves, why aren’t we investing in Canada? 

And so – we started to explore the many Canadian Real Estate Investing Strategies out there.  If you read any real estate literature, you will see that there are tons of different ways to make money – so I will go over a few of the most talked about forms.

Remember that there is no right or wrong – the model you choose ultimately must align with your goals, the amount of capital and time you have and your risk tolerance.

5 Canadian Real Estate Investing Strategies

1)Rent to Own

This has gained tons of popularity over the last few years.  Why? Because the rent to own model is probably the safest, most hands free model of real estate investing out there. 

Think about it – you buy a home, your “rent to own family” moves in, and gives you a down payment, to prove that they have some skin in the game. 

Every month they pay you rent + an ‘option’ to purchase, which means that your monthly cash flow is quite high.  Best of all, you have a family in place who treats the home like it is their own (because really……one day it will be) and your maintenance calls are almost nil. 

Oh…and there is a clear exit strategy in place, when the family purchases the home at a pre-determined price = you cashing in!! 

2)Flipping

This seems to be the most glamorous of the 5 Canadian Real Estate Investing Strategies, with the popularity of television shows like the Property Brothers and Love it or List it!.

Flipping is the way to go if your goal is to generate a large sum of cash in a small amount of time.  However, flipping also requires that you have more time and capital available! 

Let’s face it, there are so many more moving parts to renovating a home from top to bottom than simply renting it out and taking care of a clogged toilet or a small leak from time to time.

But………the profits can be large, especially when done right.  Experienced flippers know their markets well and are able to generate unique products, generating large amounts of money for themselves.  Make sure you read up on the tips for flipping real estate in Canada if this is a strategy you are interested in.

3) Buy and Hold

This is by far my favourite strategy.  However, I only came to this realization after experimenting with the other strategies and really figuring out my long term goals.  What I like about this strategy the best is the fact that time is what does most of the work!

What do I mean by that?  This strategy involves buying nice homes in nice neighbourhoods, which ultimately attracts good quality tenants. 

Every month, the tenants pay for my mortgage, and there is usually a little bit of cash flow left over after paying all other expenses and provisioning for future maintenance costs.  And best of all, because my properties are in good areas, I can probably count on a fair appreciation so my property is always increasing in price. 

But suppose the market takes a turn, or fluctuates, and appreciation doesn’t quite work out for me – well I’m still OK because 20 or 25 years down the road, my property will be completely paid for!  This is the best part!

4) Multi-family/Commercial

This is one of the most common strategies when thinking about real estate investing.  The idea of having multiple units in one location can be appealing to some investors. 

And……….it can be great provided the property is in a good area and in good condition, much like any other real estate investment.  Keep in mind this strategy involves a larger investment.

5) Student Rentals

There are some investors out there who solely focus on this strategy.  Student housing is a beast of its own, as I like to call it. 

This strategy typically involves creating a so called ‘rooming house’ where each room is rented out to a different individual, with common areas shared by all.  And obviously, your target market is students!  So these properties are typically in close proximity to higher level educational institutions (universities and colleges).

What about you?

I’d love to know what you think! Did you learn something new? Do you have another tip to add? Please share your feedback in the comments below.