Real estate fulfills a basic need for shelter. People need a place to live, work and shop where they are protected from the weather. Additionally, real estate is an investment that actually benefits from inflation. When inflation goes up so does real estate values.
If you purchase an Winnipeg detached house for $400,000 20 % down = $80,000 down payment. Then acquiring a mortgage for 80% of the rest of the value.
If you bought any other investment for $80,000 like gold, stocks or mutual funds and it increased by 10% your investment is now worth $80,000 + $8,000 = $88,000 but 10% increase on that townhouse is $40,000. you have now made a return of 50% of the downpayment. Plus the tax advantages of writing off the expenses and depreciation. This doesn’t even take into consideration the equity build-up resulting from the decreasing mortgaged principal, the cash flow.
With Real Estate investments, you are allowed to deduct, as an expense all of the mortgage interest, property tax, insurance, maintenance , repairs, professional fees, and depreciation, etc.
Depreciation is particularly a tremendous deduction that is underappreciated. This is a paper deduction which means that you do not need to spend any of your own cash in order to get this deduction.
How cool is that, that your tenant literally buys your investment property for you. The tenant pays rent which you then use to pay down your mortgage. When you invest in stocks, bonds, or metals you are the one paying for it all.
Whether you are considering investing in your first property, or you are an advanced investor preparing to purchase your next investment property; we hope you will consider a Sell ‘n STAY® property one to invest in next…
For information on investment opportunities contact Ron Zimmerman