Will your investment property actually make money? – Montreal Gazette

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Becoming a real estate investor in Canada may seem like a surefire shortcut to wealth.

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Though it has been for many, few people become successful real estate investors simply by buying whatever properties they can afford and assuming the rent will do all the heavy lifting.

A recent analysis found that, from January 2020 to May 2021, nearly all Toronto homes purchased would lose money for their owners in the rental market. Research has shown that Montreal property investors often lose money on a monthly basis .

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Choosing the right property to invest in requires careful consideration. You need to examine the surrounding neighbourhood to understand the appeal it offers residents, take a look at the local economy to ensure it’s supportive of long-term housing demand and evaluate the property itself in terms of rentability.

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And one of the most important steps is calculating cash flow, the amount of money the property will either earn or lose every month.

If it’s your first time encountering the term “cash flow,” don’t sweat it. Calculating it is fairly easy.

Monthly income isn’t everything

Though ideal, positive cash flow isn’t necessary for a property investment to ultimately be considered successful. A negative cash-flowing home can still be a winner in the long run — if it appreciates in value over time, as has generally been the case with real estate in Canada, and if you can afford the monthly cost.

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“Most people, and especially beginner investors, believe that successful investing is …….

Source: https://montrealgazette.com/moneywise-pro/will-your-investment-property-actually-make-money/wcm/4b6f1a30-a63a-45cb-b039-7036f6c6e8f6