Owning your own home has long been a favorite investment strategy for many Canadians

Few other alternatives offer the stability and dependable long term returns that this tangible and enjoyable asset provides - just ask anyone who owned stock in Enron or Martha Stewart!

Today's very favorable interest rates make buying real estate an even more attractive and affordable option.  If you're thinking of how best to profit from your real estate investment, here are a few options you may want to consider:

If you can qualify for a larger mortgage, a good way to quickly build your equity, and with a minimum investment on your own part, is to buy a property that has rental capability.  You may decide on a property with a separate apartment, or just a few extra rooms that may be suitable for a student during the school year, and leaving you your privacy in the summer months.  Be aware that rental income is taxable, but you can normally also write off your operating expenses, including repair and maintenance necessary to maintain the rental unit.   You may even be able to upgrade your property, and further reduce the portion of your income that's taxable.  Make sure you consult with your lawyer, accountant or other financial advisor to ensure you are taking full advantage of this option.

You may even decide that you want to purchase an additional property as a rental unit, having your tenant pay off your mortgage for you while your asset appreciates in value.  This can be an effective investment strategy for the right individuals, but look into all the aspects of managing a rental property before you make the final decision.  Will you be able to find reliable tenants who will respect your property and pay the rent promptly?  What amount of rent do you need to charge to help carry your costs?  Is this rent competitive with other rents charged for similar accommodations in your area?  Can you be available to handle unexpected maintenance and repairs, or will you contract such work out to a professional?  What are your legal obligations as a landlord?  All these questions must be answered before you make your decision.

Here in Canada, you can typically sell your principal residence without having to pay income tax on the profit you might realize from the sale. However, be aware that any profit you realize on the sale of a second residence, vacation property or an income property is usually taxable.  If you're thinking of buying and then re-selling a home in a short time frame just to turn a profit, make sure you know all your facts first.  Generally, real estate is not a practical short term investment.