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Is Land A Good Investment? Expert Buying Advice in Canada

Real estate is a dynamic sector. Time and again, people keep changing their views. Since the industry is in a constant state of flux, investing in real estate can be quite tricky. Now is the time to stop those sleepless nights over your investment.

The land has always been considered as one of the most valued assets since the beginning. Investors in the 21st century perceive land to be a method to diversify assets and increase income. This timely consideration is making the rounds as the nation’s Government has taken key decisions to evolve the real estate sector.

Why Investing In a Piece of Land Is a Good Idea

Investing in land is undoubtedly a beneficial decision. There are several reasons as to why a piece of land holds such great value. The top financial benefits for investing in the land right now are listed below:

It caters to every need

piece of land for saleWhen you invest in any land, you can make anything out of it.

You can hold the land as it is then sell it eventually, or build a recreational property, your dream house, a resort — your call.

Whatever your needs are, a land investment is certainly an excellent place to start.

It can be a viable retirement plan

Everything seems perfect until you are working, but what will you do after retirement? This question can be quite bothersome. The simplest solution is investing in the land. This has twofold benefits – firstly, it will give you a personal space after your retirement. On the other hand, you need to think of ways to earn money once you retire. If you own land, you can sell it at a reasonable sale price later or rent it for a fixed monthly income and equity.

It steadily appreciates, especially in good locations

Several properties and plots are easily available right now. You can research to know about developing areas and mortgage plans. You may not realize, but owning land in these upcoming areas will increase the future value of the plot. Thus, you will get a good return if you want to sell it off at a later point in time. Different locations provide different ambiance. Therefore, you should first decide the type of surrounding you want.

It can be a passive income source

Instead of focusing on just retirement, you should consider ways to earn more in the present. Investing in the land allows you to give it out for rent.

A common concern that land investors have is the maintenance cost that they need to pay regularly. The catch here is that the earning that comes from rent is way more than what you need to pay for maintenance. Thus, it is a sure-shot way to keep earning! As time advances, you can increase the rent and equity according to market conditions and area development.

It gives you more freedom with your investment

It is common math that a small plot of land will cost less than a bigger one. However, you should not fall for this petty trap. The key is to focus on the pros and cons of the land, the long-term benefit you are likely to get, and how it can be developed ahead. If, after these considerations, you note that the bigger plot is more beneficial, then you must go for that. It is imperative to appreciate the land value.

It diversifies your net worth

Investing in land is one of the best methods to diversify your net worth. You can build anything on the land you are buying. This can be a personal property or any commercial space too. It can be owned or rented, whatever suits you the best. New facilities are cropping all over the city. It is the perfect opportunity to establish your name in the big league. With the onset of success, you can invest in more land and build a private chain.

The options are limitless

Last but not least, investing in land allows you to cater to plenty of amenities that you desire. You can build any amenity for private or public use. Thus, it can be understood that you are the ultimate boss of the process. Owning land is always a good investment!

Is There a Guarantee of a Good Return on Investment?

investment returns

The general guidance that everyone provides is investing in land ensures a good return on investment. But is that completely true? Real estate is illiquid and indivisible. This means that it is an inflexible investment. In such a situation, is there a guarantee of high earnings? No, not really.

The deals are always based on good timing. As mentioned earlier, the industry keeps changing. There may be a period of extremely low real estate rates. But then there will come a time when the prices rocket to the skies. The return on investment for real estate can be tricky.

You must consider stock prices and market rates closely. Real estate investment trusts can also help you make the right decision. As a smart investor, you should weigh risk across several categories of commercial real estate and geographic areas (1).

Be Aware of All Tax Implications

You must pay all taxes to the Province. Avoiding taxes means criminal charges, and you do not want that at all costs. Properties and investments come with a particular set of tax deductions. You must beware of these and pay them on time. Or, the Province has the power to usurp your plot.

Let’s consider an example. Imagine that you have purchased a land, which is a house property. You renovated it and sold it at a higher profit. Then, the Canada Revenue Agency will step in (2). In case more than 90% of the house’s interiors, such as walls, ceiling, and floor space are altered, then the profit will be taxed as business income. Property flipping is not as easy as it sounds. You must seek professional advice regarding the process.

In case your property is across the borders, then it is recommended that you take the help of professional cross-border tax experts and advisors. They know the law of the land like the back of their hands. With this proper guidance, you can invest in any piece of land hassle-free.

How To Be Sure of Overseas Investment?

Coins keys and home

It is a dream for everyone to invest in an overseas property. It does not just give you a sense of satisfaction, but also improves your public reputation. However, you need to steer clear of fraud.

There are instances when people have been promised that the investment is going to bear fruits, but eventually, nothing materialized. The deposit money is gone, and a feeling of being duped is bound to take over.

Thus, when you want to invest in overseas land, you must seek the advice of the local advisor from your area of interest. You must make time to visit the site and inspect it yourself. Read the local laws and business practices of the land.

If you are investing in a domestic property, you must rely on a dependable team of inspectors. The lease agreement should be read carefully. Lastly, hidden landlord expenses and the tenant mix should be discussed without any hesitation. After these considerations are cleared, you may invest with a free mind.

Study What Is Possible

It has been noted that a lot of Northern Canada residents invest in multiple properties. However, this is a small group that has numerous properties to their names. In such a situation, it misbalances the entire system. The investable assets need to be measured before any such step is taken. Investors often preach that they will be able to make the property’s payment over time.

However, they forget to consider what they will do if they fail to get tenants for their Ontario land. Thus, you must weigh these pros and cons of the land or assets properly before making any decisions related to them.

Always remember that you must treat every real estate investment as a business. One factor that should never slip your mind is positive cash flow. High-priced market assets of Ontario and Vancouver may make it difficult to maintain positive and eternal cash flow.

However, it is not impossible. Many areas throughout these Provinces are developing rapidly. The team at Precondo have seen more and more people each day flocking to look for new condo developments that they can invest in. These condominiums have several features that attract the masses and promise to improve lifestyle quality.

Final Thoughts

There are many risks in investing in real estate. These are taking additional debts, spending on costly repairs, dealing with bad tenants, and getting hit with a lawsuit. Thus, you must manage these risks well. Once you understand this guide properly, you will realize that investing in Ontario land right now is one of the best investments for a lifetime.

The sooner you invest in a land property, the more chances you have of making profits. Several plots are available across Canada. You can search them on the website, no specific details of finance, and drop mails for any queries you might have!


References:

  1. https://www.fool.com/millionacres/real-estate-investing/
  2. https://www.canada.ca/en/revenue-agency/services/forms-publications/publications/t4037/capital-gains-2016.html

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