Real estate investment is a large topic, covering everything from fixer-uppers to ownership of large complexes. For British Columbia investors looking to get into the real estate market, it can help to know the different investment options available to them.
While there are many “types” of real estate investment that can be pursued, here are some of the most common:
- Rental units inside a primary residence: This is one of the more common ways of maximizing the value of a primary residence. It involves renting out part of the home, such as a basement or a bedroom. Short-term rentals may also be considered. There are many legalities around such rentals, so it is important to check with a lawyer before going this route.
- Purchasing a rental property: Those who have extra cash on hand may benefit from purchasing a home or complex to rent out. Rental income can help cover the mortgage and upkeep on the property, as well as possibly generating profit. Additionally, the property can appreciate in value over time.
- “Flipping” a home: This can be a risky and time-consuming move, but those who know what they are doing can make substantial income. It helps to be highly knowledgeable about the market and to be “handy” when it comes to fixing things up. A house can be fixed up and then sold or, alternatively, converted into rental units.
Some consider the principal residence where one lives a real estate investment, even if nothing is done to it, as it can increase in value and be sold at a profit. Others define investment only as transactions outside of one’s home. Regardless of how one defines real estate investing or the route one takes to make an investment, it can be a complex matter, especially if mortgages and refinancing are involved. For this reason, it is important to involve a British Columbia real estate lawyer early on when looking to buy, sell, lease or do business in general with a property.