Retiring Rich with Mississauga Real Estate

The Mississauga downsizing options that I am sharing with you here are based on my opinion and are backed by my personal experience. My advice does not construe to be one of a financial advisor, as I am a Realtor and not a financial consultant. Please read on, but do consult with your financial planner before taking up one of the proposed strategies presented here. After all, it is your retirement that we are talking about. You must make your own informed decisions, supported by professional advice.

If you are in your 40s and planning to retire in your 50s or early 60s, I would advise you to invest in real estate to reap good results. After having worked in the real estate market for a more than a decade and witnessing first-hand that leveraging real estate worked out very well for investors in our market since 2002.

I invested in a Mississauga condo, and eventually into more than one. (I did this in my late 30s and early 40s, now I am turning 50!) My decision proved to be a good one as our GTA market has been steadily growing over the past fifteen years.

Cash Flow is King

Here is a strategy for Mississauga downsizing options for people in their late 30s or early 40s might consider doing. (But again, I recommend you consult with your financial advisor first as he or she can suggest diversification in many different types of assets including cash, stocks, mutual funds etc. in addition to real estate). On a side note, financial professionals top my real estate investors client list. 

Small condos in Mississauga is the name of the game!

A small 1-bedroom or a 1BR + den condo as an investment is relatively less expensive. Low prices appreciate faster as there is always demand from buyers in terms of affordability.

Simple economic principle at work – more people can afford a $300,000 property than $400,000 property. More the demand, higher the price increase will be.

So, if you have $60,000 – $65,000 sitting in your account, it could be a nice idea to invest in 1 or 2 Mississauga condos, or at least one condo to begin with, and watch it grow over the years.

A one-bedroom or one-bedroom plus den condo can be easily rented out to qualified tenants. This is what we do for our investor clients on regular basis. Your real estate investment runs on its own with no cash-flow-loss to you. And if the market goes up or down, it would make no difference, as you are in it for a longer haul. Investing in higher value properties require more out of pocket cash. Plus, they also have a low rent to buy ratio.

Some may argue that the condo fee (learn about condo fee myths) may also increase over the years, which they do increase, by an average of 4-5% per year. Sometimes they don’t even increase if the condo management does a good job of managing the corporation and balancing their annual budget. But remember, even if condo fee does increase within limits, so does the rent. This takes care of the small increases in condo fee, taxes etc. And the monthly rent from the tenant is essentially paying down your mortgage + property tax + condo fee + landlord insurance.

How Smart Investors Fast Track Their Real Estate Wealth Building

Some of our clients take a little different approach to their real estate investment strategy for retirement.

They start off by booking not one, but two condos, a resale condo and a pre-construction condo at the same time. In a couple of years when the pre-construction condo gets ready, they assess their personal situation and see if being a landlord for two properties makes sense for them or not given their current personal circumstances.

If not, then they sell one and move the mortgage to the second one. If they are doing well with the first one, that is to say that the condo price is appreciating and the quality of tenants is good; they can rent out both the properties.

Good news is that typically there are no issues with Square One condo renters; one can find quality tenants easily in this market. And you can continue as a landlord happily for the next 14-15 years when both the properties are paid off and become mortgage free.

Retiring Rich by Investing in Real Estate

Now even if these properties appreciate at only 5% per annum, we are talking about a compound return of 107% on buying price, which means, each condo which was bought for $300,000 becomes $623,000 in 15 years time. For some readers, 15 years can by the time you are ready to retire. Of course, buying, selling, improvements costs will eat up some this profit. Even after paying capital gain tax on 50% of your gain, investing in real estate makes a lot of sense.

The best part about real estate investing is that rent pays off your mortgage+taxes+condo fees, when you buy with a good down payment (25% to 35%). Finding you good investment properties in Mississauga, renting to qualified tenants and helping you manage properties is our expertise. Read more at Real Estate FAQs.

Assuming by this time your principal residence is also paid off, you have a bunch of Mississauga downsizing options. You can now sell both your investment condos, and do what you want with the cash. Or you can sell your home and one condo and move into the 2nd condo. Or you can simply cash out and start renting (a popular downsizing trend with seniors). Take the cash, travel, add it to your nest egg, save for healthcare – you are free to do as you please with your partner, or by yourself.

This is my 50th year, and this is what I am planning on doing in the next couple of years. If you are following my blog posts and learning from my experience and life journey, this one is straight from the horse’s mouth!

Mississauga real estate investing is the way I have successfully accumulated wealth. However, end of the day, contentment is key!

You gotta know where to stop. Stop working, stop worrying, and stop trying to accumulate more wealth.