Why “Waiting Out the Market” Doesn’t Work for Toronto Real Estate Investment

There are many factors that come into play when deciding to invest in real estate, with price being one of the larger deciding factors. While it may appear wise to take a “wait and see” approach to a changing real estate market in Toronto and the GTA, there are a number of reasons why waiting simply may not be the right choice for you.

 

Lost time is lost income

When planning to make a new real estate purchase with the intention of turning it into a rental property, the time spent waiting around for the market to react can result in a loss of critical rental income. Ideal properties, opportunities, and tenants come and go, but missing the chance to snatch them up can cost you.

 

In fact, the amount of rental income being earned over any period of time is far more significant than any incremental drop in average housing prices that may or may not occur. This source of income is steady and predictable in ways that the Canadian housing market simply isn’t. An interruption or a late start in receiving rental income will hurt your wallet far more than the amount hypothetically being saved by a slight future dip in the market.

 

Canadian housing prices very rarely fall

Perhaps the best advantage to taking the “wait and see” approach when buying a new property is the idea that housing prices will fall below the level they are currently at. While this may seem practical, in most cases it simply won’t happen.

 

Statistically speaking, the Canadian real estate market as a whole has proven year after year that price drops are incredibly uncommon. According to data collected by North Cove Advisors, the last significant drop in Canadian real housing prices was nearly a decade ago. Rather than prices falling outright, the real estate market instead tends to fall into periods of slow growth – not exactly the ideal outcome of the “wait and see” strategy.

 

Looking to the future

One way to know for sure that the “wait and see” strategy is not going to yield positive results in the current Canadian housing climate is by looking to the future of the market. The Toronto Real Estate Board is currently projecting at least a single-digit price increase throughout the remainder of 2017 – all signs currently point to it being correct in that assessment.

 

By analyzing recent developments in the housing market as well as historical data, you’ll soon discover that true dips in the prices of Canadian real estate are rare. Waiting for the “right moment” to buy can leave you sitting on your hands for years, losing a significant amount of potential rental income in the process.

 

If you are considering purchasing a rental property, contact Highgate Property Investments. Our business is both real estate and property management, and we can help you with all aspects of your new real estate venture.

By | 2018-06-05T16:23:19+00:00 September 18th, 2017|Real Estate Investments|Comments Off on Why “Waiting Out the Market” Doesn’t Work for Toronto Real Estate Investment

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