Smart strategies, risk management, and a lot of patience are keys to building a thriving real estate portfolio in Canada. Jack Daniel Bernstein built a $7-million portfolio at 28 – by using innovative real estate investment approaches like house hacking and the BRRRR method.
Here, we will discuss his methods and all the other great ways to maximize your returns by investing in pre-construction homes in Canada:
1. House Hacking for Income Generation
House hacking simply means that you buy a property, live in one part of it, and rent out the rest. This helps you cover your mortgage payments and reduce living expenses.
Bernstein, for example, bought a semi-detached home in Oakville as his first real estate investment venture. He converted it into a duplex and covered his mortgage through rental income.
2. The BRRRR Strategy
The BRRRR (Buy, Renovate, Rent, Refinance, Repeat) method is certainly a genius move in real estate investing. You buy a property, renovate it, rent it out to generate income, and then, refinance it to buy more.
It is a great way to build a real estate portfolio without injecting new capital every time.
3. Invest in Pre-Construction Homes
Pre-construction homes in Canada are prime choices for those looking for capital appreciation and building a passive income stream. Pre-construction properties are available at a much lower price and as the project nears completion, the value appreciates significantly.
In 2023, more than 100,000 pre-construction homes were sold across Canada showing that this trend is growing.
4. Take Advantage of Green Building Trends
Sustainability sells. Eco-conscious buyers are looking for pre-construction homes with energy-efficient appliances, solar panels, and green roofs. You should focus on these features too to make sure your property has a long-term value and appeal.
5. Leverage Smart Financing
Strategic financing can help you make more real estate investments. Many lenders are offering flexible loan structures to help you grow your portfolio without too much stress.
6. Renovate to Increase Property Value
Renovation is an important step in the BRRRR method that can help you increase your rental income significantly. While renovating, focus on high-impact areas like kitchens, bathrooms, and energy-efficient upgrades for maximum returns. If you are buying pre-construction homes, these are the features you need to prioritise.
7. Invest in High-Demand Markets
Toronto, Vancouver, and Montreal are the hotspots of real estate investments. Pre-construction homes in these cities show faster appreciation due to limited supply and high demand. In Toronto, for example, property prices increased by 6% in 2023. In Montreal, the Griffintown area saw property prices rise by 7%.
8. Use Virtual Tools to Attract Tenants
Virtual tours of properties are now available even before construction finishes. You can preview your pre-construction homes and show them to prospective buyers and renters to close deals sooner.
9. Focus on Multifunctional and Adaptable Spaces
The best aspect of pre-construction homes in Canada is that they offer greater flexibility. You get customizable layouts – which make them more desirable.
10. Keep a Pulse on Market Trends
This year, interest rate cuts have fuelled demand for pre-construction homes. We are also seeing an increased influx of immigrants and international students in Canada which has led to a rise in the rental market as well as home sales. If you are considering investing in Canadian real estate, this is the right time to do so.
Conclusion
House hacking, the BRRRR strategy, smart financing, and investing in pre-construction homes are some of the ways to get good returns from the Canadian real estate market. Some of the hotspots where the demand remains strong are Toronto, Vancouver, and Montreal.
And don’t forget. Renovations, smart home technologies, and sustainability can add to the value of your property and increase your rental income considerably.
Consult an expert to learn more.
