Canadian Entrepreneur with Global Invest, on a mission to help people invest in real estate to create generational wealth.
There are many reasons to invest in real estate abroad, especially in Canada. The purchase of a profitable rental property in Montreal is an excellent way to generate an advantageous increase in value. Indeed, the Canadian real estate market is a very attractive sector for economic activity.
Making an investment and becoming a landlord is no easy task. You can be subject to unforeseen events such as long rental vacations or many months of unpaid bills. This could seriously tarnish your rental yield and adversely affect the prosperity of your first investment. Buying a property in one or more major cities is smart in terms of amortization. It saves you from putting all your eggs in one basket.
Here are the five main reasons to support the idea of investing in real estate abroad.
Diversifying Your Investments
Diversifying your investments is one of the keys to entrepreneurial success, and it also ensures a net return in the event of a potential drop in real estate prices in one or more locations. I always advise those who wish to invest in acquiring a property (co-ownership, new apartments, etc.) to consider geo-diversifying their property ownership through the technique of leverage.
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Leveraging can be a creative source of funding — it allows investors to make an exponential return on their investment by taking on additional debt. It is an attractive alternative for any real estate developer who wishes to make investments and build a legacy.
Investing in real estate allows you to access a powerful leverage effect and an advantageous tax system. Unlike France, Canada has a very effective leverage effect that will allow you to invest even more with refinancing, which is the process of replacing an existing mortgage with a new loan.
Accessing Advantageous Taxation
Tax advantages are also one of the reasons to invest in real estate abroad. Canada offers the following tax advantages:
• Amortization of the purchase price of 4% per year.
• An attractive tax credit system.
• Light taxation of property income.
• The possibility for foreigners to benefit from local financing.
• Exemption from social security contributions.
• Tax flexibility gives the investor the possibility to make a real estate investment with significant net returns.
• A steadily growing real estate market.
Canada’s real estate sector has shown steady growth for more than 20 years, especially in Montreal, where the real estate market grows by 5.5% every year, even during the pandemic. Therefore, it is a favorable economic destination to invest and build up a real estate portfolio over the long term.
Attractive And Accessible Prices
Montreal is one of the cities where the price per square meter is very accessible. In the suburbs of Paris, the price per square meter can go up to 10,000 euros. The price per square meter in Canada varies between 2,000 and 3,000 euros, depending on the real estate sector.
Canada boasts a transparent and free market. Indeed, all the data and information you need to make an investment and generate income in the Canadian real estate sector is available and accessible.
Canada has favorable conditions for foreign investors. When you decide to own or invest in real estate (new or old), you should be aware that Canadian law does not impose any special obligations on foreign investors. Foreign landlords are subject only to the same obligations as Canadian landlords, so there are no additional tricky or complicated laws to navigate.
A Growing And Reassuring Real Estate Market
Canada is a growing economic environment with a very low unemployment rate. The booming economy and high employment make Quebec the most reassuring and secure area in Canada.
Very High Demand For Rental Real Estate
Montreal is one of the main centers of immigration in Canada, which has naturally exploded the statistics for rental demand. With a wide range of universities and higher education institutions, Canada is also a country where demand for student rental accommodations is stable and growing.
In short, if you’re looking to invest in real estate abroad, Canada is a very appealing option due to its economic stability and growth potential. In addition to an attractive tax system, it also has a thriving real estate sector. All these factors certainly make rental management much easier.
The information provided here is not investment, tax or financial advice. You should consult with a licensed professional for advice concerning your specific situation.