Learn how to invest in private real estate with your RRSP and diversify your portfolio for long-term growth.
It’s that time of year again. The RRSP contribution deadline is March 3rd, 2025, and taking advantage of this powerful savings tool can help you reduce your taxable income today while building wealth for the future.
But did you know that your RRSP can do more than hold traditional investments like mutual funds or GICs? With a self-directed RRSP, you can expand your portfolio and explore exciting opportunities, including investing in private real estate. This is a little-known yet powerful way to use your RRSP to diversify, achieve higher returns, and tap into an asset class traditionally seen as out of reach.
In this article, we’ll explore how to make the most of your RRSP, including why private real estate might be the perfect fit for your investment strategy. You’ll learn:
- Why private real estate investments are more accessible than you might think.
- How registered investments like RRSPs work.
- The benefits of using your RRSP for real estate investments.
- How to use your RRSP to invest in real estate.
- How to assess the right opportunities for your goals.
If you’re looking for ways to make smarter, tax-efficient investment decisions, this guide is for you. Let’s explore how to make your RRSP work harder by opening the door to RRSP-eligible investments in private real estate.
Want to learn more about RRSPs and Private Real Estate Investing? Check out the full webinar
Breaking the Myth: Real Estate Investing Isn’t Just for The Ultra-Wealthy
When people think about private real estate investing, many assume it’s only for the ultra-wealthy. But the reality is that private real estate has become far more accessible in recent years, offering opportunities for a broader range of investors.
Who Can Invest in Private Real Estate?
There are two main categories of investors who can access private real estate opportunities in Canada:
- Accredited Investors:
- Annual income of $200,000+ individually, or $300,000+ with a spouse, for the past two years.
- Net assets of $5 million or more.
- Financial assets of $1 million or more, before taxes and net of liabilities.
- Eligible Investors:
- Gross annual income of $75,000+ individually, or $125,000+ with a spouse, sustained for two years.
- Net assets of $400,000 or more, including their primary residence.
While the accredited category is often associated with private deals, the eligible investor category opens the door to more Canadians, offering entry points with lower thresholds. This means you don’t need to be a high-net-worth individual to participate in high-quality private real estate opportunities.
How Parvis Is Making Private Real Estate Accessible
Platforms like Parvis are revolutionizing private real estate investing by:
- Offering low minimum investments, allowing individuals to get started with smaller amounts.
- Providing a user-friendly digital platform that simplifies the process of finding, evaluating, and investing in opportunities.
- Curating a diverse range of projects to meet different financial goals and risk profiles.
These changes are democratizing access to private real estate, helping more Canadians benefit from this lucrative asset class.
Demystifying Registered Investments: Why RRSPs are Ideal for Private Real Estate
Now that we understand how private real estate is becoming more accessible, let’s talk about how registered investments fit into the picture. Registered investments are government-registered accounts designed to help Canadians save and grow their wealth, with unique tax advantages that can make a significant difference over time.
The three most common types of registered investment accounts in Canada are:
- Tax-Free Savings Account (TFSA): A flexible investment account where earnings and withdrawals are tax-free, designed for a variety of savings goals.
- Registered Retirement Income Fund (RRIF): A tax-sheltered account used to convert RRSP savings into a steady retirement income.
- Registered Retirement Savings Plan (RRSP): A powerful tool for building retirement wealth while enjoying tax advantages. Contributions are tax-deductible, which can reduce your taxable income, and investments grow tax-free until withdrawn.
While each account serves a unique purpose, the RRSP stands out for its higher contribution limits and suitability for long-term retirement savings, making it a perfect vehicle for private real estate investments.
How RRSPs Work
- Contributions are tax-deductible: Every dollar you contribute reduces your taxable income, lowering the amount of tax you owe for the year.
- Investments grow tax-deferred: Any growth—whether from dividends, interest, or capital gains—remains untaxed while it stays in your RRSP, allowing your savings to compound faster.
- Withdrawals are taxed as income: When you retire and start withdrawing funds, the money is taxed at your then-current income tax rate, which is typically lower than during your working years.
Why RRSPs Are Ideal for Private Real Estate
Many Canadians don’t realize that RRSPs can do more than hold traditional investments like mutual funds or GICs. With a self-directed RRSP (more on this below), you can invest in a wider range of opportunities, including RRSP-eligible private real estate investments.
RRSPs work so well for this purpose because:
- They have higher contribution limits than other registered accounts: RRSPs allow you to contribute up to 18% of your earned income, capped at $31,560 for 2024, providing more room to allocate funds toward high-growth investments like private real estate.
- Tax savings free up capital for investment: By reducing your taxable income, RRSP contributions immediately provide cash savings, which you can reinvest to further grow your portfolio.
- They’re intended for the long-term: Private real estate often requires a medium- to long-term commitment, which aligns perfectly with RRSPs, as funds are intended to remain invested until retirement.
- You can maximize growth potential: Tax-deferred growth within an RRSP means your private real estate investments can compound without being diminished by annual taxes, improving long-term returns.
What Can I Invest In?
Private investment opportunities in real estate offer a range of options to suit different financial goals and risk tolerances.
Real Estate Investment Trusts (REITs)
REITs generate income by acquiring and managing income-producing properties, such as apartment buildings, office spaces, or shopping centers.
The rental income collected from these properties is distributed to investors as dividends, often on a monthly or quarterly basis. REITs are legally required to pay out a significant portion of their profits—typically 90%—to shareholders, making them a consistent income source.
RRSP-Eligible REITs on Parvis
- Revesco Properties Trust: Focuses on prime retail real estate opportunities across the United States, delivering consistent returns through high-quality assets.
- Epiphany Legacy Investment Mutual Fund Trust: Acquires residential and commercial properties in emerging, high-growth cities within Western Canada’s secondary markets.
Mortgage Investment Corporations (MICs)
MICs allow investors to participate in real estate lending. They earn money by providing short-term loans to property developers or homebuyers who may not qualify for traditional bank financing.
These loans generate interest income, which is distributed to investors as dividends. MICs are also structured to pay out most of their earnings, offering stable and often higher yields compared to other fixed-income investments.
RRSP-Eligible MICs on Parvis
- Ginkgo MIC: Specializes in financing residential and commercial mortgages with higher interest rates than traditional lending.
- Secure Capital MIC: Offers reliable monthly income through a portfolio of short-term residential loans backed by Canadian real estate.
Direct Deals
Direct real estate investing involves buying a stake in a specific property. With direct investing, you can pick exactly what to invest in based on criteria that matter to you, including property location, property types, deal structure, and more.
- Basecamp Resorts: Offers a unique opportunity to invest in the expansion of luxury Nordic spas across Western Canada, targeting high growth in the global wellness market.
Private Real Estate Funds
These funds pool capital from investors to acquire and manage a diversified portfolio of real estate assets. Income is earned through a combination of rental revenue, property appreciation, and strategic asset management.
Investors receive dividends from rental income and may also benefit from capital gains when properties are sold at a profit. The professional management of these funds often aims to maximize income while minimizing risks, making them an attractive option for long-term growth.
RRSP-Eligible Funds on Parvis
- Parvis Direct Access Fund: Combines development projects, multifamily properties, and mixed-use buildings to create a balanced investment portfolio.
- Bluestar Flagship Fund LP: Focuses on high-caliber small and medium-sized enterprises, both public and private, with strong growth potential through expansion or stand-alone opportunities.
Evaluating Investment Opportunities
Choosing the right private real estate investment is an important step in building a strong portfolio. At first, it might feel overwhelming, but focusing on a few key points can help you make confident decisions.
- The Property or Project: Start by checking out the property itself. Is it in a good location? Does it have strong income potential? A well-managed project with clear goals is usually a solid option.
- The Management Team: The people behind the investment matter. Experienced and trusted managers with a track record of success can make all the difference in whether an investment performs well.
- Access to Your Money: Private real estate investments often involve longer holding periods, so think about how long your money will be tied up and whether that fits your financial goals. Unlike stocks or bonds, these investments aren’t typically as easy to sell quickly.
At Parvis, we’re here to guide you through the process. We take the time to get to know your financial goals and risk tolerance, helping match you with investments that align with what you’re looking for.
Connect with one of our Dealer Representatives today
Start your Private Real Estate Investment Journey
Investing in private real estate through your RRSP is a powerful way to diversify your portfolio, maximize tax benefits, and build long-term wealth. By exploring options like REITs, MICs, private funds, and direct deals, you can take control of your retirement savings and tap into opportunities that were once out of reach.
The March 3rd RRSP contribution deadline is fast approaching. Don’t miss the chance to take full advantage of this year’s contribution room and set yourself up for long-term financial success. Create your free account with Parvis today to get started!
Learn more about investing in private real estate with RRSPs. Check out the full webinar here.
