In terms of investing, nothing quite comes close to real estate. With the right team, carefully chosen assets, and patience, investors can see returns that easily beat the stock market. Below is a breakdown of why real estate is such a powerful wealth building tool.
Land is a finite asset. As populations increase real estate is in greater demand and rises in value. Home developers understand and know the value of land. Look at all the new home developments all over the GTA. Home developers are constantly looking for land.
Owning real estate can be almost like buying a small business, if you decided to rent the property. If you pick the right property in the right place, it can generate enough income to cover operation costs and yield a profit.
In the stock market $100,000 buys you $100,000 worth of stocks or bonds. In real estate $100,000 can gets you a half million-dollar asset. Leverage is your secret for exponential growth.
PHYSICAL AND TANGIBLE
For those who find stocks and bonds confusing, intimidating, or too abstract, real estate offers an investment you can touch and see. It’s a real tangible product.
Diversifying your portfolio is wise. However, when the whole market takes a tumble, whether you’re invested in 10 or 1,000 companies, you’re taking a hit. Adding property to your investments helps protect against market volatility. (volatility def: a tendency to change quickly and unpredictably. Merriam-webster.com)
A WORD OF CAUTION
While real estate investing has helped many Canadians achieve their financial goals it does not come without its own set of unique challenges. Like any investment, it’s important to assess how this financial product fits into your portfolio, your tolerance for risk, and your life.
One drawback to real estate is a lack of liquidity. If you decide to unload your stocks or bonds, sales can be executed in a matter of minutes. Ask anyone who’s bought or sold a home and they’ll tell you that’s almost impossible with real estate. Another point of consideration is your investment timeline. Real estate has many strengths, but speed simply is not one of them. To truly profit from your investment you need a long horizon and a healthy amount of patience.
REALALT: A NEW HOME FOR YOUR INVESTMENT
In the June 2021 edition of The Dorr Insider report, we covered the three primary types of real estate investments: appreciation, cash flow, and flipping. However recently a new-ish or lesser-known product has entered the industry. RealAlt is a mortgage investment fund offered by Dorr Capital. It connects investors with our exclusive network of builders in the GTA, Barrie, and Kitchener-Waterloo looking to build homes for the over 1.2 million new Canadians projected by 2023.
RealAlt is a mortgage fund trust. That means investors share risk by pooling investments into medium-term diversified mortgages and receive monthly dividends. And because of the way the fund is structured, it qualifies for tax minimization products such as RRSP and TFSA.
BUILDING SOLID PROPERTIES AND PORTFOLIOS
In the past 10 years Dorr Capital has seen sustainable, profitable growth with zero per cent loan losses and $1.5 billion of loans to-date. Backing RealAlt Investments is the natural evolution of the company’s financial strength, aptitude and reputation in the industry. As experts in bespoke land and construction loans, Dorr Capital is excited to introduce investors to a new, stable way of investing that yields high returns, helps fuel the local economy, and meets projected demand for new Canadians.
Dorr Capital is a boutique mortgage investment corporation specializing in land and construction loans in the GTA. www.dorrcapital.com/realalt/ 416-484-9747
Update – June 29/2021
We have launched RealAlt Investments – a Mortgage Fund Trust, licensed under the Exempt Market Dealer, investing in Land & Construction development, building communities in Ontario. For more information please visit this web page on our site.