top of page
Search

How to combine short, medium and long-term real estate investments

  • sasha540
  • Aug 29, 2025
  • 4 min read

Updated: Sep 2, 2025

As a savvy Canadian real estate investor, you know the value of a diverse portfolio. Mixing short, medium, and long-term strategies helps spread risk and take advantage of opportunities as the market shifts. A well-balanced plan, inspired by modern portfolio theory, can support your financial goals and build long-term security.


Short-term investments, generally under a year, focus on liquidity and flexibility. Medium-term holds, from 1 to 5 years, can generate cash flow while leaving room for value growth. Long-term ownership, usually 5+ years, is where Canadians build wealth through appreciation, equity growth, and tax planning strategies such as claiming Capital Cost Allowance (CCA) on rental properties.


By diversifying your real estate portfolio across time horizons, you can align with your risk tolerance and financial objectives while protecting against market cycles.



Key Takeaways

  • Combine short, medium, and long-term investments to diversify your Canadian real estate portfolio.

  • Short-term (under 1 year) investments prioritize liquidity and flexibility.

  • Medium-term (1–5 years) holdings provide steady income and potential equity growth.

  • Long-term (5+ years) ownership builds wealth through appreciation, CCA, and stable cash flow.

  • Diversification across property types, locations, and strategies is essential.


Understanding Investment Time Horizons in Canadian Real Estate


Short-Term Investments (Under 1 Year)


Short-term investments prioritize quick turnaround and liquidity. In Canadian real estate, these could include:

  • Fix-and-flip projects (higher risk but faster returns if executed well).

  • Short-term rentals (Airbnb, VRBO), which can generate above-market rents but are subject to local bylaws and seasonal demand.

  • Private lending or mortgage investment corporations (MICs), which may offer higher yields (often 6–10% historically) but carry credit and liquidity risks.


Caution:

  • Fix-and-flip projects: Both the Federal and BC Provincial Government now have anti-flipping taxes in place that target sellers who are trying to flip a property quickly.

  • Short-term rentals: Short-term rentals in BC have been restricted to primary residences, and secondary or accessory units on your primary residence property.


These are best suited for investors who want faster access to capital and are comfortable with higher risk.


Medium-Term Investments (1–5 Years)


Medium-term investments balance cash flow and value growth. In Canada, this often means:

  • Small multifamily properties in cities or university towns.

  • Commercial leases with 3–5 year terms.

  • Value-add rental properties, where renovations improve both income and property value.


Medium-term strategies allow for refinancing opportunities, giving investors the ability to recycle capital into new projects.


Long-Term Investments (5+ Years)


Long-term real estate ownership is the backbone of wealth building in Canada. Benefits include:

  • Appreciation & equity growth: Property values in many Canadian markets have historically risen over time, though growth is not guaranteed.

  • Stable rental income: Particularly strong in growing urban centres.

  • Tax benefits: Canadian investors can claim Capital Cost Allowance (CCA) to reduce taxable rental income (with recapture rules when selling).


Unlike the U.S., Canada does not have 1031 exchanges. Investors here should plan for capital gains tax when disposing of properties that aren't your primary residence.



Strategic Benefits of Diversification Across Horizons


  • Short-term: Flexibility, potential for higher but riskier returns, and quick capital access.

  • Medium-term: Balanced income and growth, refinancing opportunities, and portfolio scaling.

  • Long-term: Wealth accumulation, tax planning, and multi-generational security.



Core Portfolio Building Blocks in Canada


  • Short-term: Fix-and-flip, furnished rentals, private lending, MICs.

  • Medium-term: Duplexes, triplexes, small apartment buildings, value-add opportunities.

  • Long-term: Larger multifamily, commercial, and development land in growth markets.


When selecting markets, Canadian investors should consider:

  • Population growth (immigration is a major driver in cities like Toronto, Vancouver, Calgary).

  • Employment trends and infrastructure projects.

  • Provincial landlord/tenant laws, which vary widely and impact cash flow stability.



Risk Management in Canadian Real Estate


  • Emergency fund: Keep liquidity in traditional vehicles (cash, high-interest savings accounts, GICs). Real estate should complement — not replace — emergency reserves.

  • Market cycles: Canadian markets experience ups and downs; diversifying across regions (e.g., Ontario, Alberta, BC) can reduce exposure.

  • Regulatory compliance: Understand local bylaws, rent control regulations, and short-term rental rules.


Modern Investment Vehicles in Canada


Canadian investors today have more access to diversified vehicles:

  • REITs (Real Estate Investment Trusts): Publicly traded on the TSX, providing liquidity and professional management.

  • Mortgage Investment Corporations (MICs): Allow investors to pool money into real-estate-backed loans, often paying monthly distributions.

  • Private equity funds & syndications: For accredited investors, offering access to larger development or multifamily projects.


Be cautious with U.S.-based crowdfunding platforms (e.g., Fundrise, Arrived, Groundfloor, Concreit) — while they advertise low minimums, Canadian participation may involve tax complications and currency risk.



Balancing Proportions Across Timelines


There is no universal formula, but Canadian investors might consider:

  • 10–20% in short-term, higher-risk projects.

  • 30–40% in medium-term holdings for income and growth.

  • 40–60% in long-term core properties.


The right mix depends on your age, risk tolerance, and financial objectives. Review and rebalance regularly to stay aligned with your goals.


Conclusion


Canadian real estate offers opportunities across short, medium, and long time horizons. By combining fix-and-flips, cash-flow rentals, and long-term buy-and-hold strategies, investors can balance liquidity, growth, and wealth creation.


With smart planning, attention to Canadian tax rules (like CCA and capital gains), and diversification across provinces and property types, you can use real estate to build financial security for the long term.


Recommended For You:


Find more great tips, strategies, and real estate information on our blog.


View new listings here.


I am a Victoria-based local realtor with eXp Realty. My commitment to honesty, integrity, loyalty, and hard work have been essential pillars for me because they drive a high standard of excellent service for my clients. Helping you realize your dream is my goal!


I service Vancouver Island, but my focus is on Victoria, Sooke, Saanich, Malahat, Shawnigan Lake, Cobble Hill, Duncan, and the rest of the Cowichan Valley.



 
 
 

Comments

bottom of page