If you have been paying attention to the news lately, you are likely feeling a little bit wary of what’s going on in the real estate market. The theme has been doom and gloom for the past while as the Bank of Canada continues to raise interest rates. 

However, the reality of the situation is really not as bad as the media would have us believe, and if you are in a position to buy a home, now is actually quite a good time to do so. 

Even more so, for real estate investors, the outlook is really positive. So is now a good time to invest in Ottawa real estate? In our opinion, yes!

Here is why:

Being a Real Estate Investor is a Long-Term Commitment

Unless you are buying and flipping homes (which is a different story altogether), buying an investment property should be a long-term commitment for you. Real estate in general is a “buy and hold” investment, and this is even more so the case for actual investors. 

In general, real estate prices always trend upwards in the long term. So even if you may see a few slight dips in home values over the years, you can feel pretty confident that in 5-10 years, the value will have gone up. 

Additionally, if you purchase a home when the market is down, you will realize even more gains as the market will eventually correct itself. 

---

Learn more about the Ottawa real estate market here:

• Know Your Real Estate History and Succeed in the Ottawa Housing Market
• Rising Interest Rates in Ottawa: What You Need to Know
• Why Use an Experienced Ottawa Real Estate Team in a Shifting Market?

---

Higher Interest Rates Lead to a Stronger Rental Market

When interest rates go up as they are currently doing, it has a ripple effect that eventually trickles down into the rental market. Essentially, higher rates will make it more difficult for buyers to qualify for mortgages, as a result, more people enter the rental market, and the demand for rentals increases. 

Additionally, with higher interest rates comes higher mortgages and landlords are able to charge more for rents than they could in a low-interest rate market.

Buyers who have the means to afford to buy a home with a higher interest rate will also benefit because there will be less competition to buy. This means buyers can negotiate more and can include conditions in their offers that they couldn’t have done when we were at the peak of the seller’s market in February. 

What are the Benefits of Being a Real Estate Investor in Ottawa?

If you’re on the fence about investing in real estate, consider this: real estate is often thought of as a more stable investment than say, stocks for example. Real estate appreciates slowly, and provides owners with more than one channel to grow wealth.

Here are a few things to consider about real estate investing:

• As an investor, you have cash flow coming in each month as a result of rental fees from your tenants. 
• You are also building equity in your rental property, while your tenants are the ones paying your mortgage. 
• Many fees you pay as a landlord including the interest on your mortgage payments, and professional fees are tax deductible at the end of the year (please speak with a tax specialist to learn about your unique position.)

How to Buy an Investment Property in Ottawa

Ottawa is a diverse city with many different neighbourhoods and property types. There is no right or wrong way to be a real estate investor and there are many options available based on your unique goals and circumstances. 

For example:

• You could purchase a home with a secondary dwelling or basement apartment. 
• Building a secondary dwelling or basement apartment is also an option and some lenders offer specific mortgage products to help make these types of improvements to your home.
• If you have children attending college or university, you could help them avoid the cost of living in residence or finding a student rental by purchasing a condo or investment property for them to live in while they are in school. 
• You could purchase a condo or pre-construction condo that allows for rentals in the building. 
• If you are currently living in a condo and wish to upsize, you could keep your existing condo as a rental property when you move out. 
• You could purchase a duplex or multi-unit building.

The options for real estate investment in Ottawa are endless if you know where to look! 

Interested in learning more about secondary dwellings in Ottawa? Read our blog post about it right here.

Which Ottawa Neighbourhoods are Best for Investors? 

As mentioned above, Ottawa is a diverse city with a strong economy and beautiful neighbourhoods. When it comes to real estate investing, there is opportunity everywhere, however, there are some neighbourhoods that are particularly fruitful for Ottawa investors. 

Here are a few to note:

West Ottawa – The area around Woodroffe Ave. and Nepean are great options for investors. Algonquin College is located in this neighbourhood and there are numerous students looking for off-campus housing close to the school. The area has also seen great development with shopping, dining, and transportation becoming more accessible in recent years. 

Old Ottawa South and The Glebe – Carleton University is located just across Bronson Ave. from the neighbourhood of Old Ottawa South. The Glebe is also quite close to the school. This is a great location for investors. These neighbourhoods are peaceful, quaint, and full of charming local businesses and amenities, which also make them highly sought-after for families and young professionals. 

Centretown – Areas like Sandy Hill are perfect for investors hoping to rent to students from the University of Ottawa. With a great central location and easy access to iconic Ottawa landmarks such as the ByWard Market and Rideau Canal, this area is perfect for investors.  

Hintonburg – This trendy neighbourhood is home to amazing amenities, shops, restaurants, fitness studios, and more. Hintonburg is quickly becoming one of the most popular neighbourhoods for young professionals.

Westboro – With some of Ottawa’s top schools in the area as well as higher-end shops, eateries, and amenities, Westboro is a great neighbourhood for families and professionals. For renters looking for a fantastic neighbourhood with great amenities, Westboro is hard to beat.

Civic Hospital – Named for the neighbourhood’s hospital, this area is filled with beautiful older homes and lovely properties. However, its proximity to the hospital makes it an amazing neighbourhood for investors too. Medical professionals and students are always looking for accommodation close to the hospital, and this neighbourhood offers it all! 

Kanata North – Kanata is home to the country’s biggest tech park, and many high-profile tech companies are headquartered there. As a result, we see a lot of renters coming to the area as they are moving to Kanata for work. With many new construction projects, there is also a great opportunity for investors to find a great rental property and an ideal tenant!

By no means is this a comprehensive list, these are just a few of the top neighourhoods we have seen from an investment perspective. 

Are you interested in learning more about becoming a real estate investor in Ottawa? Reach out to our team today at 613.829.7484 or email us at mail@chellteam.com.