Invest in a Property

GTA homes in general and Mississauga properties in particular, have been steadily increasing in value over the years, helping your investment grow more than you know. I often get this concern from a lot of investors. I am told that the returns from real estate in Canada are very low. Properties are said to grow at only 5% on an average. So what’s the point of investing with such low returns? This is how I explain.

Most of us use a leverage of 20-25% as down payment to buy property. If you were to buy a $500,000 property with a down payment of $125,000 (25%), and over ten years this property is worth $750,000, the return on your down payment of $125,000 is 200% before taxes (250,000 divide by 120,000). This leverage helps in evaluating profit or loss. Can you imagine that?

Depending upon the down payment, your rent helps pay for other costs such as mortgage, taxes and maintenance. At times, you may not want to invest but simply seek a mortgage free home. Of course, nothing beats a mortgage free home.

But if you want your money to grow, a small dip into your home’s equity can leave you with enough room to invest in a safe and sound real estate market, close to your home.

In fact, I see a great future for our Canadian real estate market. Here are other ways to make the most out of real estate, with the least amount of hassle.

Take it easy. Allow me to manage your tenants

Very often, the thought of a landlord tenant relationship gives some the jitters. If you believe that managing tenants is not your forte, don’t worry. I truly understand your feelings. I hate mowing my lawn too, doing groceries, ironing clothes and spending time on household chores that come with our Canadian lifestyle. So what I do instead is have it all taken care of by someone else. This allows me time to indulge in what I love doing best, i.e. buy, sell, rent and manage properties. If managing tenants is an issue and you have no intention of turning into a landlord, allow me to help you out. I’m happy to take care of your tenant needs from start to finish so that you can make better use of your time.

Upgrade into a bigger home

If you have not completed three or more years in your new home, buying a new home usually makes little sense.

Buying and selling can cost up to 7% of your home’s price. You need to add home improvements which mean further expenses up to 3%-5% or more of your home’s price. So if you were to sell, your breakeven price should be at least 12% more than your initial home buying price. Only when the price has gone up by 12% or 4% per year, does it make better sense to sell.  You can almost always port your mortgage from one home to another home without paying penalties to your lending institution.