Our latest blog by RE/MAX says it is. Read the story here:
“Is real estate a good investment?” It’s a question that real estate agents get asked often. Long-term real estate investments have historically generated excellent returns. However, how much you pay for the property, how much it appreciates, and how long it takes to build an ROI comparable to or better than other investments varies greatly.
If you’re wondering, “Is investing in real estate worth it?” read on and let REMAX help you decide if it’s right for you.
At a Glance: Why Real Estate Is a Strong Investment
- Real estate appreciates over time
- Generates passive rental income
- Provides tax benefits and leverage
- Helps diversify your investment portfolio
What is the Average Rate of Return on a Real Estate Investment?
For most investors, the appeal of real estate as an investment vehicle is the prospect of a strong overall return and the opportunity for a steady monthly income from the rental of the property to tenants. But what does the data say? Let’s look at the numbers to help determine what profits investors in Canadian real estate might expect.
Understanding Real Estate ROI
Why is real estate a good investment? Two primary components factors to the potential for a significant return on investment: capital appreciation and rental income.
Capital appreciation refers to the increase in the property’s value over time. Rental income represents the revenue an investor could receive from tenants. The profits from both components vary based on factors such as the property type, location, condition and real estate market trends, as well as on external economic conditions.
Capital Appreciation
Property prices tend to rise over the long term – and historically, real estate has been a good investment in terms of capital appreciation. But keep in mind that future market performance might not mirror past trends.
So, is investing in real estate worth it? According to Canadian Real Estate Association (CREA) stats, there’s no doubt about it.
