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Real estate is one of the best ways to make a lot of money

Many financial advisors who sell financial products (mutual funds, stocks, bonds etc) to their clients believe in this statement. Here is why: a leveraged real estate (mortgage loan) gets funded by tenant’s rent cheques. Where as funds borrowed to invest in stocks or other financial assets etc. need timely interest payments that an investor has to generate on a regular basis.

In my 16 years of experience in selling real estate to small investors, I have witnessed how our investor clients have become wealthy over time. I am going to share with you a few things that these people did right. To become a real estate millionaire in Mississauga or elsewhere, all you need to do is to follow good things that some of these successful people have done.

Financial goals and commitments differ from person to person. Financial goals also change with age.

When a person is in their early 20s, they may choose to pay off their student loan, buy their first car, or fund a backpack holiday to another continent etc.

When a person is in their late 20s or early 30s, they may want to save for their marriage, an engagement ring, reception, honeymoon etc.

Many lucky children receive financial help from their parents to fund their education and some even get a cash gift from parents to secure a property. I know a few who have received both these benefits. How lucky!

Couples in their mid 30s may look into investing in their first home or a condo, and subsequently plan on starting a family etc. Soon the family financial goals may revolve around sending children to daycare, extracurricular activities, and upsizing to a bigger home etc.

And once couples are in their mid 40s, the responsibilities of sending children to university or college education may begin.

Some people have already invested in an investment property by their mid 40s or early 50s, or in a cottage where the family spends their vacation or weekend getaways.

Many lucky children receive financial help from their parents to fund their education and some even get a cash gift from parents to secure a property. I know a few who received both these benefit. How lucky!!

Now when parents reach mid 50s or early 60s, they start looking forward to retiring by downsizing or moving from an expensive city to a more affordable one, and use different calculations to help fund a comfortable lifestyle in their retirement years.

Throughout these stages of life, some smart minds have used real estate to help them achieve financial freedom faster than many of their peers.

Smart Teenagers:

Some of the teenagers that I have come across (including mine) chose to stay at their parent’s home by going to universities and colleges that were close by. These teenagers instead used the money saved (money that parents would have ended up paying on boarding, lodging etc), to book a condo along with their parents from a builder. It can take 3 year or more to receive a brand new condo from a builder, and these investments grow in value. Some sold their property to pay off their student loans or fund further education etc. Others kept this investment to fund future investment goals (marriage, investing in a bigger home etc.)

Young Executives/ Entrepreneurs:

It is important to pay off one’s student loan, of course it was taken for a good cause but this loan is a bad debt. I have seen students who choose to pay only minimum amounts of this loan instead of paying it off quickly. Instead they use their earnings to buy an investment property. These smart young men and women live with their parents while tenants help pay off their investment property mortgages. Their properties grow in value over time. They then use this profit to finish off their student loans. Those who had no student debt have kept properties as their investments, or have moved into the properties, or have sold them to buy something else.

I have also seen many young adults who use their bonuses or extra incentives to max out their TFSAs (tax-free savings account). TFSA is a great financial product. See how a regular $210 bi-weekly funds invested in low fee index fund can grow tax free when 25 year old person reaches 55 years of age (the historical average annual return on S&P 500 adjusted for inflation is around 7%). Warren Buffett has famously said that the best investment most Americans can make is a low-cost S&P 500 index fund that will simply track the market’s performance over time.

New Immigrants & Renters:

Smart renters or new immigrants don’t throw their money into renting for a long time. I have witnessed many renters who buy within a year or so of renting. Then there are some new immigrants who don’t rent at all. They buy with 35% down payment under “New to Canada” home buyer’s plan.

Savings for Marriage:

I know some of my clients’ children who opted for smaller, less extravagant weddings, and used their savings to buy a home instead. I am not suggesting that you should do the same, of course marriage is once-in-a-lifetime thing. For some, it matters how much you pay for the diamond ring, the venue, beautiful flower arrangements, high definition videography, designer dresses, gifts your guests will take home, the brand of scotch you will serve, and making sure your guest list includes all those who have invited you to their events. For some, $40k, $60k or $80k is nothing when it comes to getting married, and if you think these things matter, go for it.

Imagine people who saved $25k-$50k by choosing to have a smaller wedding only to buy their first home instead of renting.

To keep renting and saving to pay off a student loan or an extravagant marriage can take a long time and real estate moves further away.  Again, it’s your choice and everyone is right when it comes to making their life’s important decisions.

Buying your first home:

A few years ago, I met a young professional who wanted to rent even when he qualified to buy an entry level condo. Though he was a financial consultant, he made little sense when it came to discussing financial matters. This guy wanted to wait to get a bigger freehold home and chose to rent until then. I tried to suggest not to wait to buy real estate, but to buy real estate and wait instead. He ended up renting.

Smart investors make money work for them rather than working for money. They buy a small condo first, and trade it in for a bigger home in a few years. The current property appreciates in value, equity builds up, and less money is required to buy a bigger home than if one decides to wait to save more for one’s dream home.


Some of my clients fast tracked their future savings by investing in not one, but two condos at the same time. This strategy worked out very well for them. I am confident that these people will be very happy retirees, and can even downsize with peace of mind.

My 2 Cents:

The biggest roadblock for investors when it comes to investing in real estate is their fear about handling tenants and managing rental properties. The most frequently asked question we hear is: “Will I be able to rent my property?” Well, of course yes, we have such a short supply of rental properties. As a team, we help you buy good investment properties, find you AAA tenants, and on top of that we also provide a la carte property management services to all our clients who buy with us. So if you’re thinking of investing for your children or yourself, call us for free consultation.

Disclaimer: I am not a financial consultant even though I have many financial advisors and accountants as my clients. Any financial investment must be done after consulting your financial planner or accountant etc. 

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