One of the safest ways to build your overall wealth is through real estate investment. Whether you are investing in a family home or an actual income property, it is possible to grow your net worth by purchasing real estate, and making a smart sale. Keep reading to find out why we think property ownership can be one of the smartest ways to protect your finances.

Purchasing a family home

Financial well-being might not be your first thought when buying a home to live in, but it can be one of the smartest financial decisions you’ll make.

When you purchase a property, you gain a valuable asset that contributes to your net worth. When you buy the right property, you also stand to gain equity from that asset over time.

Generally, any additions or improvements you make to your home to increase your own quality of life will simultaneously increase the value of your property.

If you are intentional about the upgrades you make, you will not only profit from the potential price increase due to market progression, but also the added value from renos/repairs.

Viewing your home as a potential vehicle for financial growth is important. As a homeowner, you should be thinking about the future, not only the present transaction.

Consider your overall financial health when planning a property purchase, and how this asset can help provide long term financial stability.

Buying the wrong property or transacting at the wrong time can have negative implications, so being strategic about when you buy or sell your home is key to ensuring you remain financially stable.

Whether you plan to be in your home for 5 years or 50, you can make a plan with your realtor that fits your life goals and maximizes your overall net worth.

Selling your home

This is a crucial financial decision that will likely significantly impact your net worth, as you will be converting your asset from real estate to cash. Many factors contribute to the return you’ll receive from your sale, including:

• Property condition
• Market conditions
• Listing strategy
• Negotiation strategy

Preparing to liquidate your asset isn’t a process to enter lightly. Every decision you make from the time you decide to list your property is going to impact your final cash return.

To solidify your market position, you need to work with a real estate expert familiar with your neighbourhood and micromarket. The information and support you will receive from an experienced professional is the key to securing the best possible price for your home.

A licensed agent will thoroughly evaluate your home, help you determine a strategic listing price, educate you about the current market, plan a tailored selling strategy, and intelligently represent you in negotiations.

Purchasing an income property

Whether you are a seasoned investor or you are buying your first piece of real estate for investment purposes, purchasing an income property can be a lucrative business venture. Clearly defining your goals is the first step to navigating the world of investment real estate:

• Are you planning to build a real estate investment portfolio?
• Are you looking to fund a particular activity or interest?
• Are you diversifying your income streams?
• Are you preparing for retirement?

Once you know why you are investing, you can decide how to invest. There are endless opportunities in the Greater Toronto and Hamilton area—Canada’s most highly industrialized region.

Depending on your goals, different options will be best suited for you to achieve the highest possible ROI. Your real estate agent will help you choose the right property type, location, and tenants.

Compared to typical stock investments, Investing in real estate to grow and protect your finances can be a smarter decision. The real estate market tends to be more predictable, and having a tangible asset can give you more options for producing wealth. With an income property you can:

• Build wealth through equity growth
• Generate revenue through cash-flow positive investments
• Leverage existing equity to acquire additional real estate or other assets

While real estate investing holds the potential for various opportunities to grow your net worth, there are many factors that contribute to a successful venture.

You need to be aware of the rules and regulations you must adhere to as a landlord, be familiar with navigating the Landlord & Tenant Board, stay up-to-date with city by-laws, and understand capital gains and how they impact your finances.

There is a lot to consider, but working with an experienced realtor who works specifically with investors and investment properties will protect your interests and ensure your financial health throughout your venture.

When it comes time to sell your investment, your agent will help you craft a sound strategy that takes advantage of market conditions, and considers what you want to do with the funds from your sale, so that you continue to grow your wealth.

Real estate isn’t just for living. It’s for improving your financial health as well. Whether you are buying a family home or you are purchasing an income property, the potential to strengthen your finances is great. Whatever your reasons for buying real estate, you have the potential to grow your net worth. Working with an established realtor with experience buying primary residences and income properties will ensure your interests and your finances are safeguarded.