Right now is a great time to add or begin your investment portfolio. In this post, we will help you learn more about some of the great real estate investments you can make to diversify your portfolio in Calgary!
In today’s market, diversification is more important than ever. To have a truly stellar portfolio, you’ll want to include stocks, real estate, and other assets to help build your wealth. That said, you’ll want to diversify within these categories, investing in different industries as well as different types of real estate. Below, we have highlighted 5 different types of real estate you can use within your portfolio. As always, reach out to ASAP House Buyers for assistance in finding the Calgary investment properties that are right for you.
Single Family Housing
By studying key components such as where transportation lines are going in, new jobs are being created, and/or where your target tenants want to live you can buy for future appreciation and market growth. This is a great way to have an appreciating asset where your client (your tenant) is paying down the debt. Many landlords have purchased with future appreciation in mind and seen their properties double or even triple over the years. As the saying goes “Don’t wait to buy Real Estate, buy Real Estate and wait”.
Legally Suited Properties
This is a great way to turn a single property into 2. The City of Calgary has been in need of affordable housing for over a decade now, they used to turn a blind eye to illegal basement or backyard suites, but no more. The City is giving a grace period to bring all suites up to a fire safety standard and have them legalized FOREVER. Right now is an incredible time to purchase properties and get a suite legalized with less “red tape” and expenses than will be required after 2021. Adding the income of an additional suite can increase cash flow by 25-30%, allowing the property to pay for itself in no time.
Multi-Family Housing
Investors can find many benefits with multi-family properties when used to diversify their portfolio. With multiple tenants, comes multiple income streams. Even if someone moves out and you have a vacant unit, you will still be receiving income from the units that are occupied. The downside is that you will have to find and screen more tenants, deal with more phone calls, and possibly have to mediate disagreements between the people living in your building. That said, your repairs costs can be lower (you’ll only have to replace the roof once) and you are more likely to generate a guaranteed income each month. With the right tenants, a multi-family will provide you with a substantial income for years to come!
Commercial Properties
Commercial real estate can be extremely lucrative, but there are a few things you should be looking for. First, you’ll want to determine which type of commercial property you are looking for. You could choose retail, medical, office buildings, or other property types that will be viable in your area. Analyze a few deals and get a good idea of how to properly run the numbers. You’ll want to run some comps, determine the net operating income, gross income, and cap rate amongst many other factors. Most importantly, make sure the property is currently occupied with high-quality tenants, or that you purchase a property that will attract them.
REITs
REITs are a popular investment vehicle for those interested in investing in larger real estate assets but lack the capital to do it all on their own. Investing in a well-researched REIT can be a way to generate profits while lowering your risk. Shares in a publically traded REIT can be purchased through a broker. You can also invest in non-traded REITs and REITs through a mutual fund or exchange-traded fund. While you will still need to do some homework, investing in this manner will give you the added benefit of experience on your side. These funds don’t make money unless you do.
At the end of the day, it is important that you focus on making investments you are comfortable with. That’s not to say you won’t find yourself a little bit out of your comfort zone, but you should still be making purchases that make sense.
To learn more about how we can help you diversify your portfolio in Calgary send us a message or give us a call today at 403-613-8119!