November 24th, 2023 | Homeowners

Should Empty-Nesters Invest in Ottawa Real Estate?

Up until the last few years, the traditional path regarding real estate for many couples and families followed a simple formula. The standard formula meant buying a house when you were young to raise a family. Many years later, you’d sell the home and downsize; maybe to a condo or small townhouse and capitalize on some of the equity generated from the sale of your larger family home while enjoying a care-free lifestyle.

However, there are numerous options available to you in today’s market, and many people are finding joy and satisfaction along paths that are anything but traditional. For example, some empty-nesters have found a different way to capitalize on the equity they have worked so hard to build in their family homes. For empty-nesters, Ottawa just might offer great investment opportunities and might also be just the place to think about re-investing some of the equity in your existing home.

What Are the Benefits of Investing in Ottawa?

Ottawa offers a dynamic and fast-growing real estate market that is generally far more accessible than what you find in larger Ontario cities, like Toronto and the GTA. Ottawa benefits from financial stability thanks to a high number of government jobs and a thriving technology sector that attracts many young professionals to the city.

As an empty-nester, you will likely seek to purchase investment property that might become your own residence, a pied-a-terre or a stand-alone investment. For property owners, especially those focused on investing, there are several opportunities to consider:

  • Generate passive income by renting out part or all of your home. If you’re a retiree with the mortgage fully paid, this is pure profit minus your maintenance, insurance costs, and taxes. Affordable rentals is a big opportunity in today’s Ottawa market.
  • If your property is close to a university, you could convert it into student housing to increase your earning potential even more.
  • Later on, you can sell your investment property to fund your retirement lifestyle. Alternatively, you can keep it in the family to pass on to the next generation.

The thought of passive income may be intriguing, but the potential for equity growth is even more exciting. Though real estate values have fluctuated over the last few years, they have risen substantially over the long term. In other words, the longer you own a property, the more its appreciation in value adds to your net worth and purchasing power.

Do you want to explore your options for downsizing in Ottawa even further? The posts below are a great place to start:

What Are the Risks to Investing in Ottawa?

As one of the most stable markets, it’s easy to talk at length about the benefits of investing in Ottawa real estate. Unlike stocks, your money isn’t tied to a business that could close its doors forever. Land and housing will always have value, even though prices will fluctuate. 

However, no investment is without some degree of risk. When you know what could happen, you can be prepared and have the resources to meet the challenges directly. Let’s take a look at a few of the worst-case scenarios you might potentially face:

  • You could buy a property only to see real estate values fall afterward.
  • Finding the right tenant might take longer than you planned. In the meantime, you will have to cover the cost of the property without relying on rental income.
  • The worst scenario of all, you end up with the wrong tenant and may have to appeal to the LTB (Landlord and Tenant Board) for a resolution.

Though none of these scenarios are ideal, there are strategies to help avoid them. The best thing you can do is to have a financial cushion available that allows you to carry the cost of your property even when it is vacant. A thorough background check isn’t a guarantee but can help you avoid problem tenants.

A local real estate team with investment experience can help you analyze your resources and the current market to help you spot the best opportunities for your personal situation. When you look at the big picture, the equity gains you will enjoy over time can offset any challenges you face in the short term. 

Explore the Possibilities

Once you know your risk tolerance and your resources, you can begin exploring what investment paths are right for you. If you’ve never owned or managed an investment property before, it may be best to start simple. You could test the waters by renting out space in your own residence, rent an unused bedroom to a local student. This is a relatively risk-free way to determine whether you are ready to be a landlord. Best of all, you generate income while you learn! From here, the possibilities, including within your existing home, are nearly endless.

  • You can renovate your home to add a secondary suite. Your potential income becomes even greater, and both you and your tenant enjoy more privacy.
  • You could keep your home while moving to a smaller condo or townhome. Your earnings could cover all or most of your living expenses. Many downsizers have found this to be an excellent way to fund their retirement dreams.
  • What about selling your home and buying a triplex? You can earn more by having multiple units to rent out, and the resale value of a house with income potential tends to be high in any market.

Renting out your existing home while you spend your winters down south or overseas is another possibility. You can travel the world while generating automatic income each month. The ideas are endless!

What is it like to sell a house in Ottawa today? A few of our recent posts will give you an idea:

Leverage the Expertise of a Professional Network

Thinking about the many doors that are open to you can be exciting. It can also be nerve-wracking as you try to navigate a fast-changing market. Where do you begin? A successful real estate adventure starts by leveraging the knowledge and experience of those who have been through it before. 

  • A mortgage broker can provide access to the best interest rates and financing terms.
  • A professional management company can allow you to enjoy the benefits of investing in real estate without any of the headaches. 

However, a local real estate team can be your most valuable resource of all to guide you through every step, from finding the right property to analyzing the cost versus profit potential. No matter where you are on your journey, you are never alone.

Do you have questions about the many opportunities within the Ottawa real estate market? We are here to help with anything you need, big or small. Reach out today to or 613.829.7484 for more information.