A research note from the Bank of Canada suggests those investing in condos for the rental market could have made a better choice.

The note acknowledges that buying into a real estate investment trust (REIT) historically outperforms direct purchase of a condo for rent.

The research focuses on Calgary and Toronto and looked at return on investment over various time periods. In Calgary for example, a medium term investment in a REIT of between 3 and 7 years yielded a total return of 78 per cent against a 41 per cent return on a single condo investment.

However, for those looking for a shorter investment, the condo saw an 18 to 27 per cent yield over a 1 to 2 year period, while the REIT only managed 11 to 12 per cent.

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