1.       The bank purchases your investment for you, and your tenants pay it off! Real Estate is the only investment that the banks will actually give you the money for the investment. This eliminates a huge portion of risk that goes along with investing. Compare investing $500,000 in the stock market to buying a $500,000 house. The amount of research you need to do to make a stock market investment of that size is unbelievably large. It can take months to years to decide on funds, ETF’s, stocks, etc. A real estate purchase is typically 0-5 months. Now let’s think of the risk if you choose the wrong stock – you lose all YOUR hard earned money; if you choose the wrong house and it falls apart, an insurance company will pay you for your repairs. Try getting an insurance company to back up your stock choices! If you choose the wrong house and you want to sell, you may be selling at a loss if you have only owned the property for a short period of time. Selling at a real estate loss in Canada may mean 2-5% (of the money you never had to forfeit in the first place), which truly means peanuts in the stock market industry. 

2.       Capital Gains Tax. If your property appreciates in value and you decide to sell, this tax is the only one of its kind where you pay tax on only half of your profit rather than on 100% of such earnings. So if you made $50,000, you will be taxed on only $25,000. If only we could do that for our income tax! 

3.       Appreciation. Over time, the value of the property will go up, and your investment will appreciate. The only million-dollar question is “over how much time?” 

4.       Rent increases with inflation. As inflation rises and your house value goes up the rent you charge your tenants will also rise with inflation. 

5.       Amortization of the loan. This is the big one! Remember that money that’s not yours but the bank gave you? Well, every month this loaned money becomes smaller and smaller. Every month your tenants will give you money to pay down the bank loan. This type of passive income is a quiet subtle way to work your way towards wealth.

Want to Start Investing? Contact Us at 778-355-0116