With COVID 19 disrupting the world economy, many industries suffered huge losses. Therefore, many people are now skeptical about investing in the most secured sector- real estate.
Are you also wondering whether you should invest in real estate amidst the pandemic scenario? When you voyage through the waters with caution, you can unlock various investment opportunities that’ll build your wealth and portfolio in the industry.
Thankfully, with real-estate investments, you have the advantage to choose from various options such as home equity loans, Home Buyer’s plan through RRSPs, loans from banks, etc. You can visit here to know more about investing in a property.
The Canadian Real Estate Association (CREA) reported that real estate sales in the country jumped up by a whopping 7.2% from November to December in the initial pandemic period (2020). Following this, the nation’s property sales were reported to be at an all-time high and increasing.
In fact, the amount of property investment transactions also increased by a whopping 12.6% from the pre-pandemic scenario.
This increase can fundamentally be attributed to the following reasons:
All these factors make the pandemic era exceptionally good for property investments.
Read Also:
Let’s understand the factors you should consider before purchasing a property.
COVID-19 came with nasty surprises. And financial instability was one of them. The low wage and higher rates of daily essentials might have imposed a financial burden on many.
Purchasing property involves a significant investment, and most importantly, it is a life-altering decision.
While the banks might require a good credit score for low rates, home equity loans might offer you the necessary financial backing even without a stable earning.
Loans from banks, mortgages, financing from credit unions, and taking advantage of government benefits are a few ways to get financial support to buy your first home.
A better understanding of each type of mortgage can help you make an informed decision.
When you opt for a fixed mortgage, you’ll be locked into a specific interest rate for the entire loan period. This way, you can better plan your budget, get better transparency and enjoy the lower rates during future cases of inflation.
With variable mortgages, interest rates vary depending on the broader economic scenario.
After the interest rate, the next thing you need to consider is the terms of the financing option. You can opt for early closure through lump-sum repayments with an open mortgage. However, open mortgages might have higher interest rates or mortgage fees.
Closed loans are inflexible and don’t allow early closure. However, you might get lower rates for these loans.
When you want to purchase a property in Canada, you’ll first need to make a down payment. Conventional financing offers financial aid after you pay a 20% down payment of the total price on your own.
If you can’t afford the 20% down payment, you might opt for high ratio financing. You only need to make a 5-10% down payment in this case. However, the interest rates might be higher.
Home equity loans offer financing at competitive rates. Since your property is provided as security, you don’t necessarily need to have a good credit score or stable income to secure the loan.
Additionally, you can secure up to 95% of the home value. Expert mortgage brokers with extensive experience can help you find the correct home equity loan creditor that suits your requirement. You’ll also receive that lump sum amount directly in your bank account within a short time.
First-time homebuyers can enjoy various rebates from the government.
The Home Buyers Plan is beneficial if you have an RRSP account. First-time homebuyers get the advantage to withdraw up to $35,000 from their RRSP account (or $70,000 when you consider your spouse).
You can use this amount to finance a down payment. However, your RRSP account must be opened 90 days before the application. You need to have a signed agreement on the property purchase. The withdrawal from the RRSP plan is entirely tax-free. The repayment time limit is 15 years.
A qualifying individual purchasing a residential property can enjoy up to $750 in federal tax relief through this benefit. You can receive a maximum of $5000 non-refundable income tax credit.
Under this benefit, you’re eligible to receive reimbursement on the GST/HST you pay. This rebate is exclusively available for first-time homeowners. You can enjoy a 36% rebate on HST/GST or up to $6300 with a $350,000 or less property valuation.
Single-homes, condos, and vacation homes have become a popular investment choice in recent times. The answer to whether you should buy a home during a pandemic or not depends on certain factors:
Buying a house can be a substantial investment. However, you can benefit from rental returns and long-term value increments with an appraisal.
The housing industry is always a safe and secure investment option. It offers an excellent avenue for diversifying your portfolio. Connect with a professional mortgage broker to understand the housing industry better and choose the most suitable financing option.
Low water pressure in the house can be more than just a minor inconvenience; it…
Crowdfunding is a busy world, and an attractive video can make all the difference between…
Find the ideal prayer mat for a deeper spiritual experience with our guide on materials,…
Avoid costly damage with expert tips on preventing and fixing bad plumbing. Protect your home…
Discover why Chesterfield sofas are ideal for seniors: effortless use, ultimate comfort, easy maintenance, and…
In the realm of interior design, the quest for striking yet versatile elements often leads…