Canadian Lawyer

18 A U G U S T 2 0 1 7 w w w . C A N A D I A N L a w y e r m a g . c o m ersistently low interest rates and investors' desire for tan- gible assets have made real estate the vehicle of choice for many looking to grow their income, as anyone shop- ping for property in the Toronto and Vancouver areas can attest. Spending in real estate-relat- ed industries including construction, finance and insurance is believed to have propped up the Canadian economy earlier this year. Meanwhile, business investment has dropped in the last few years in tan- dem with troubles in the oilpatch. Despite concerns that the real estate bubble is about to burst following last year's record high investment and a series of governments' efforts to temper the red-hot market, Can- adians' love affair with property persists. For those investors, keeping up with ever-evolving rules, often involving all three levels of government, as well as other legis- lative changes could be a challenge as they also search for tax and other advantages. "People are investing in real estate, to a large extent, because they can put their hands on it. The big issue we're finding is they're steering away from the old-fash- ioned view of investing into stocks and bonds and GICs and they're actually mov- ing toward something more tangible," says Darren O'Keefe, partner in Cox & Palmer's St. John's, N.L. office. "I've seen it since 2008. In 2008, we had the issue with the American stock market, we had issues in the United States real estate. It actually caused us to take a big step back and look at what are the opportunities and what are the risks in real estate investing in Canada. And out of all that, I think people actually became grounded." Houses and condominiums can provide a steady and predictable income stream, tax advantages and a more than likely steady appreciation of the original investment, barring disasters such as the sub-prime mortgage fiasco, which crushed the market in the United States nearly a decade ago. It is also generally seen as a very stable investment, leading some investors to not be concerned that rental income may not quite square up with the costs. For those willing to take on the risk, which often involves becoming a landlord, the upsides could well outweigh the down- sides. And many who begin with one or two properties build their portfolio over time, having figured out the nuances of the tax advantages, leveraging one property to finance another and learning where to find other benefits. "The day I really knew real estate was the preferred investment vehicle for people in Newfoundland, I was at the dentist and the dental hygienist came out and we were chatting and we got into the topic of real estate and she told me: 'I have four rental properties and just about to close on my fifth.' Newfoundland is a microclimate and we seem to be more inclined, and maybe it's a product of our history, to invest in things like real estate, the tangible, if you will, before we invest in the intangible," says O'Keefe. R E A L E S TAT E By Marg. Bruineman MATTHEW BILLINGTON Not just a home When clients treat real estate as an investment, the legal and financial issues can get complex P

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