Sell and Stay Manitoba

Simplify Age In Place, Simply Sell ‘n STAY®

Investors

Real Estate as an Investment

Why Real Estate as an Investment?

Real Estate has long been known as the most powerful way to accumulate wealth. More people have utilized the power of RE Investments to become millionaires than through any other means. Although there is an obvious need to save for Retirement a recent Manulife study indicated that a startling 65% of Canadians will face financial difficulty and need their homes equity to finance their retirement.

There are many options for building wealth, but most of these options pale in comparison to investing in real estate. There are savings accounts, Stocks, bonds, Mutual Funds and money market accounts. These investments are considered safe, but mostly they barely keep pace with inflation.

Advantages of Real Estate

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.

Advantages of Real Estate

Leverage

One of the key benefits of investing in Real Estate over any other asset class such as stocks, mutual funds, commodities and government financial instruments is leverage. Leverage allows you to purchase and control a large amount of real estate with a relatively smaller amount of money.

Example

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.

Financing

You can get financing for purchasing real estate. Lenders will loan up to 80% of the market value of your property . You might be able to get financing for stocks and bond purchases but you are limited to 50% of the principal value and if the stock drops in value you may experience a broker’s margin call which means that you are forced to pay those funds back immediately.
Financing
Tax Advantages

Tax Advantages

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. 

Your tenant pays your mortgage

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. 

Why use Sell ‘n STAY® versus finding the deals and tenanting the properties yourself?

  • AAA+ tenant. No midnight police calls, no destruction of your property.
  • Long term contract. No Move in / Move out costs (0 – low vacancy rate)
  • Able to buy prime locations before they become available on the open market
  • Turn-key from the first day
  • Able to match personalities – landlord and tenant.
  • Able to select from database of opportunities.
  • No need to retrofit before you rent it.
  • No GST and PST because these are resales. Established neighbourhood.
  • Ability to see what the tenant and neighbourhood are like.
  • Ability to get us to look for opportunities in your neighbourhood of choice.
  • As professional Real Estate agents who are trained, insured, experienced and licensed we provide our members with the tools, powerful connections, and in-depth knowledge, networking with like-minded investors.

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

ron.zimmerman@kw.com