Whether buying a home to live in or an income property to generate wealth, real estate is almost always a positive step, from a lifestyle perspective and financially. Are you on the hunt for a new home or investment property in Ottawa? A rich and diverse array of real estate options awaits you, from modern condos – freshly constructed with every convenience, to stately single-family residences lining the streets of the most established neighbourhoods and everything in between! 

Oddly enough, the search for the perfect property doesn’t begin with the market; it starts with you. What goals do you have in mind, both in the short and long term? Are you looking for a place you can make your own, or is this a carefully calculated financial investment? With a clear picture of what you want to achieve, your vision is far more likely to become a reality. In this post, we’ll talk about the different wants and needs you may have as a homeowner and as an investor so you can create a success plan that works for you.

Real Estate: Always a Worthy Investment

There are many advantageous to investing in real estate early. Getting into the market when you are young frees you from the cycle of renting and grants you a firm foothold on the property ladder. 

Buying real estate gives you options for your future by laying a foundation today for the dreams of tomorrow. It all comes down to growing equity as your property appreciates in value. Prices may fluctuate, but the long-term trend has always been up. As the population grows, the demand for housing will increase and values will continue to climb.

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Looking for more reasons and tips for buying a house in Ottawa? Below are some resources that can help:

• Is Ottawa Boring? No, and Here’s Why!
• Can I Use the Same Ottawa Real Estate Agent to Buy and Sell?
• Strategies to Help First-Time Buyers Enter the Real Estate Market

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Buying Your Primary Residence

Your property doesn’t need to generate income to be a solid financial investment. Every mortgage payment can be considered a form of savings because it increases your share in an asset that continuously grows in value. As housing prices rise, your equity grows even faster, increasing your net worth and your purchasing power. 

Best of all, you have the sense of security that goes along with owning a home. You can be assured of a place to refresh and rejuvenate away from the hectic outside world, one that you can renovate and mould into your personal oasis!

Creating a Real Estate Portfolio

Even with the ups and downs of the market, real estate is still considered one of the safest and most profitable investments you can make. Look at it this way: a dollar in the stock market can quickly become $1.50, or it could disappear entirely if the company goes out of business. Unlike the trends in other markets, where financial gains can come and go, real estate will always be in high demand and short supply. 

When it comes to buying an income property two distinct advantages come to mind:

1. You benefit in the short term by earning passive income each month. The happier your tenant is, the longer they will stay, and the more profitable and peaceful your investment becomes!
2. Even more exciting than income potential is the long-term equity growth. Consider this: The average price of a house in Ottawa in 2013 was $359,500. In just ten years, average values have risen to $680,000, almost doubling. Anyone who bought real estate in 2013 would have seen their net worth increase by approximately $320,500 by 2023. 

The more properties in your portfolio, the more opportunities you have to grow your nest egg and secure your financial future. No wonder real estate is the premium choice for so many investors at all levels!

Primary Residence Vs Income Property

On paper, the process of buying an income property is mostly the same as your primary residence. In reality, buying real estate as an investment can be as different as night and day:

• Searching for your primary residence is an emotional and practical experience, whereas investing in an income property may be a strictly financial decision.
• You buy your home with your own needs, styles, and tastes in mind. When looking for an investment property, you need to consider what will appeal most to prospective tenants. 
• There are no capital gains to pay should you decide to sell your primary residence. Any increase in value is yours to keep. If you sell an investment property, 50% of any profits is added to your annual income and subject to taxes.
• A primary residence can be more affordable with a lower down payment on houses or condos less than $1 million. Income properties require a down payment of 20% regardless of the price. On the other hand, if you find the right opportunity and a good tenant, your investment can all but pay for itself.

Can Two Worlds Unite?

Is it possible to combine the best of both worlds and turn your primary residence into an investment property? Many first-time buyers are doing exactly that. As housing values and interest rates rise, it becomes more challenging to save for a down payment. 

In addition, since banks are more hesitant to approve the substantial mortgages required to finance your purchase having rental income associated with the property can help with mortgage eligibility. It’s difficult enough for long-time homeowners to obtain financing for upsizing and or the purchase of additional properties; for first-time buyers, breaking into the real estate market can feel impossible. 

However, all that can change when you spot a residence that could double as an income property. Imagine buying your first house where the basement or attic could readily be converted into a secondary suite:

• Because the property is your primary residence, you won’t be subjected to capital gains as its value increases. 
• You need less of a down payment if the home is priced at $1 million or less, even though it is technically an investment property. What a great loophole!
• Plus, many lenders allow you to factor in your projected income when considering your mortgage application, meaning you could end up with a lot more financing to make your purchase.

Best of all, finding a tenant to share your home means a significant portion of your monthly carrying costs are already covered. In the best-case scenario, you actually increase cash flow just by owning your home and generating rental income!

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Looking for more advice on successful real estate investing? The posts below will give you food for thought:

• Should I Buy an Investment Property Now for My Kids in the Future?
• Is Now a Good Time to Invest in Ottawa Real Estate?
• Does Real Estate Protect You Against Inflation?

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Your Partners in Success 

Owning real estate can lead you to a brighter and more prosperous future, whether you plan to buy a home for yourself or invest in an income generating property. However, it goes without saying that every investment comes with an element of risk, and the legalities and financing can be complex. 

Surrounding yourself with a team of experts is the best way to minimize these risks and challenges so that you enjoy the maximum benefits from your home-buying adventure. 

Over time, you will need access to real estate lawyers, mortgage brokers, financial advisors, and possibly property management companies. It may seem overwhelming at first, but like all ambitious goals, it begins with one small step. In this case, finding a knowledgeable real estate agent with investment experience will move you in the right direction. 

A local expert will help you analyze your resources, uncover the properties with the most potential, and negotiate the best possible terms for your purchase, and that is just the beginning! A reputable Realtor® with a good reputation in Ottawa can also introduce you to the other professionals you will need to make your ventures successful. With the expert guidance of each of your team members, you can look forward to a future that is nearly unlimited!

Do you have questions about buying a home or investing in Ottawa? Our local experts are standing by to help with whatever you need. Reach out today at 613.829.7484 or mail@chellteam.com for more information or to take the first step.