The global economic consequences since the spread of the COVID-19 pandemic have been far-reaching and well documented. Like virtually every business sector, Toronto’s real estate market has experienced change as a result of COVID-19.
However, our local real estate market has actually seen an influx of activity, with lots of Toronto and Ontario residents making pandemic-related moves in the market. Most professionals within Toronto’s real estate industry found 2020 a particularly ‘hot’ year, especially for sellers. With the COVID-19 pandemic still very much a primary priority heading into 2021, what will investing in real estate look like in the new year?
With constantly-changing economies and real estate markets, the year ahead will be hard to predict. If you are thinking about investing during COVID-19, consider our thinking points below before making your decision.
How Healthy is Your Financial Future?
As always, the first thing you need to consider before planning to invest in real estate is the likely health of your financial future. Facing the idea of having to pay off things like monthly mortgage costs, maintenance fees, and property taxes without a steady, reliable income is not a position you want to be in.
As the COVID-19 pandemic continues to change the face of the global workforce, future finances are not as easy to predict. Before investing during COVID-19, you have to honestly answer yourself: What do you realistically anticipate your financial future will look like? Whether you run your own business or work for an organization, forecasting the future of the global economy is no easy task at the moment.
What Type of Property?
If financing an investment during COVID-19 seems practical to you, you’ll need to think about what type of property you want to invest in. Is this a move-in ready home for you to live in immediately? A vacation home you’ll use periodically throughout the year? Or an investment property you plan on renting out?
While different regions have different land ownership laws, there are also lots of different legal and taxable regulations that come with owning multiple properties within Ontario too. Make sure you understand what you will be liable to pay for if you plan on investing, especially during COVID-19.
Read the Market Data
Whether you plan on investing during COVID-19 or not, reading the market is always an essential step to making successful investments. A macro market trend we’ve seen during the pandemic is a higher buyer demand meeting a lower selling supply, driving house prices up. However, the particular region you might want to invest in might reflect different trends.
It’s always advisable to do as much market research within the particular area you want to invest in before starting your property search. The best way to do that is to contact a local, highly-reputable real estate agent and ask for their advice. A trustworthy real estate agent will run insightful market research reports for their internal use but should be happy to share their findings with prospective clients.
Often times spur-of-the-moment investments can be the most fun. While it is exciting to jump at the chance of making a lucrative investment at an opportune time in the market, you should always think about the long-term ramifications of your investment.
As mortgage plans can vary in length and payment structures, think about what your long-term goals are and how investing in a new property might affect them. Will it shift your retirement plans too far down the line? Will seeing the financial benefit of your investment take longer than you originally anticipated to unfold? Is there a chance you might not be as enamoured with the idea of investing a few years down the road?
There are always more factors to consider than you initially think of when considering a real estate investment. Get the advice you need ahead of planning for your next investment by talking to an experienced real estate agent. Contact us here to book a no-obligation real estate consultation today.