6 Major Benefits of Investing in Real Estate
When it comes to investing your money, most people tend to think of options like the stock market or high-interest accounts rather than real estate. But buying property can be one of the safest and most profitable long-term investments you can make. Let’s take a look at some of the main benefits of investing in real estate.
Real Estate Retains Value
One of the primary benefits of investing in real estate is its stability. While it’s certainly possible to make a lot of money on the stock market with a well-timed set of trades, it’s also possible to lose just as much if something unexpected happens. While you’re unlikely to make a fortune overnight by investing in real estate, you can also relax knowing that your investment is also likely to significantly go down.
This is especially true when buying a brand-new home. New Edmonton communities are designed with buyers in mind. They have things like walking trails, and they’re always near shopping centres. As construction pushes further and further out, your new home’s location becomes even more desirable.
Even better, your new property will be built using modern building techniques that maximize energy savings. As time goes on, that’s going to become more and more important to both renters and buyers.
Great Market Conditions
2020 has certainly been a heck of a year, but the real estate market has been booming since after the initial scare from the coronavirus. The market has adjusted to meet new safety standards when it comes to showing homes, and people are buying and renting new homes.
This is the perfect time to invest in new construction. Those who are moving want bigger spaces and modern looks: two things that you can get in new construction homes that you can’t always find in older resale homes. You’ll also find that there’s a high demand for brand-new rental units. Tenants can get the feel of living in a new place without having to commit to a 25+ year mortgage payment. This just makes sense for a lot of retirees and young families alike.
A Stable Monthly Income
Another great benefit of an investment property is a predictable income. While other investments can fluctuate with interest rates or stock movements, when you have an investment property with a good tenant, you know exactly how much cash will be coming in every month. This naturally makes it much easier to plan your finances in the longer term and lets you set some goals you might not be able to with a less reliable cash flow.
What’s more, this stable income will improve over time. As your mortgage is paid off and you build equity in your rental property, the amount of cash you have coming in will compound on itself. You could even use that equity to buy another property and increase your cash flow even more!
Attracting Good Tenants With A New Construction Home
You don’t want an empty property, but that won’t be something you need to worry about if you purchase new construction. Since it’s brand-new, your property is going to look especially attractive to renters. It will have features many other rental units don’t have, such as an ensuite in the master bedroom, walk-in closets, and mudrooms by the entryway. You can also choose to include updated design details like quartz countertops and a tile backsplash in the kitchen that are already included in all Sterling Homes specifications. Clearly, your rental home is going to stand out from the crowd.
It will also stand out for being quite a bit larger than the average apartment, which is a big selling point for renters. This usually means you’ll be able to charge far more than the going rate for apartments (especially with the high-end features mentioned above). The rental price for an entire home – even a townhome – is a lot more than the price of an apartment, and if you turn the basement of the property you buy into an income suite, you’ll have multiple streams of income.
You Don’t Have To Worry About Repairs
One factor that can eat into the profits of a real estate investor is repairing any damage that occurs to the property. Fortunately, this will be significantly minimized with a brand-new home. Since everything in the home will also be brand-new, there just aren’t the repair issues that you see in older homes. In the unlikely event that a defect in the home arises, a new construction home will be covered by the Alberta New Home Warranty.
This is an especially attractive feature for those who want to dip their toe into the rental market but don’t have a lot of handyman skills. New construction rental properties are turn-key. They’re a great way to get started.
Double Your Rental Income
As you build a new rental home, you can ask us to create a separate rental suite in the basement or above the garage. These units will be created to comply with all of the rules for rental suites, and the suite will have a separate entrance for that tenant. Often, it’s hard to do this in older homes because the construction regulations have changed. With new construction, everything is done for you.
This allows you to have two separate rental units for the price of a single home. One home might be appropriate for a family, with three bedrooms and an open space for living and entertaining. The other would probably be a one or two-bedroom suite with a full bathroom and living area. This would be well-suited for a young professional, college student, or single retiree. Renting to two tenants gives you the opportunity to earn even more money!
Now’s a great time to consider getting into the rental property market. In a buyer’s market, you can get a great deal on a brand-new property, and as the current pandemic ends and life starts to return to normal, people are likely to be looking to move (or will be getting back to their plans to move that were interrupted.) Come talk to one of our Area Managers today to find out which style of home might be best for the rental situation you have in mind. We have lots of ideas for income suites as well, so don’t forget to ask!
Originally published Oct 26, 2018, updated Dec 3, 2020