One of the biggest issues Canada’s economy has faced for a few years now is the unaffordable housing market. For years, the rapid rise in housing prices has made headlines as affordability continues to be an issue for many. Luckily for investors, though, if you want an easy way into the real estate industry, you can buy stocks.
There are many benefits to buying real estate stocks, especially the fact that you need hardly any capital to begin to put your money to work.
Real estate stocks offer a tonne of flexibility for Canadians, a large diversified portfolio, and a professional management team that operates the business for you.
So whether you want to invest in the real estate market, or you’re just trying to save and invest your money to keep up with the rapidly increasing housing market, here is one of the best real estate stocks to buy in Canada.
Forget Canada’s housing market: Here’s a top long-term growth stock to buy
Over the last few years, housing prices have grown rapidly in value making the sector one of the hottest places for Canadians to invest. However, you don’t necessarily need to buy a house to gain exposure to Canada’s high-potential housing market.
A stock such as InterRent REIT (TSX:IIP.UN) is another excellent opportunity. In fact, investors of InterRent have likely done better than almost any homeowner over the last decade. In the last 10 years, unitholders have earned a total return north of 840% or a compound annual growth rate north of 25%.
So while Canada’s housing market has created some major returns for investors, there are several high-quality stocks like InterRent, that offer many advantages.
One of the most attractive features of InterRent’s business is that it has a consistent strategy that sees the company rapidly grow unitholder value.
InterRent looks for older apartment buildings to buy that are in need of upgrades and renovations. It then plans these investments strategically, ensuring that each dollar it spends creates much more in value.
InterRent considers upgrades to the interiors of the suites and the common areas. It also considers renovating or even adding amenities to the buildings as well.
By adding a rooftop patio or movie theatre, for example, InterRent grows the value of the building and the rent it can charge to its tenants each month.
This is a straightforward strategy that InterRent has executed to perfection for years. Canada’s housing market is already rising rapidly, and rents are always increasing. But because InterRent is consistently investing in growth, it’s growing the value of its units and the rents it charges even faster than the rest of the market.
This is what’s led to the incredible returns that unitholders have earned over the last decade and why InterRent is one of the best real estate stocks to buy now.
While getting into Canada’s housing market is a desirable goal for many, there are several advantages that real estate stocks can offer, and InterRent is proof of that.
In addition to the fact that you need little money to begin investing, you also get a professional management team that works for you, as well as countless other benefits.
So if you’re looking for a high-quality investment you can buy long-term, InterRent REIT is a top choice.
This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.
Fool contributor Daniel Da Costa owns shares of INTERRENT REAL ESTATE INVESTMENT TRUST. The Motley Fool has no position in any of the stocks mentioned.