Creating Income Sources For You !
Statistics Canada reports that a mere five percent of Canadians will retire comfortably or wealthy – which segment of retirees will you fall into? When you choose investment real estate as an important component of your balanced portfolio and retirement plan, you are recognizing that real estate investing done right can provide you with a secure, long-term source of income.
Tipping The Scale In Your Favour
When you choose investment real estate as part of your portfolio you are tipping the scale of successful investing in your favour. Here’s how:-
Diversification
Asset Class Diversification
Reducing the overall risk level of your investment portfolio is something you strive for and having real estate investments form a part of the solution is a decision with far-reaching benefits.
Asset class diversification is a key component of risk reduction because it ensures that at least a portion of your investment portfolio is performing well. Adding investment real estate to the range of asset classes you invest in will help offset the volatility of other assets, such as stocks. This reduces the overall risk level of your portfolio, providing steadier returns with reduced volatility.
Economic Cycle & Regional Diversification
A key part of my due diligence process involves analyzing where a region falls within the typical economic cycle. When you own multiple properties located in multiple regions you are able to maximize your exposure to various economic cycles and more effective capitalize on the benefits of market timing when you decide to sell a property.
You can also diversify the ongoing performance of your real estate investments by choosing regions affected differently by varying economic conditions. This is why, over time, a real estate portfolio spread out over various regions is preferred to one centered in a single region.
Market Timing
Effective market timing, or “buying low and selling high”, is a crucial component of successful real estate investing. While it is difficult to time when a market has reached the bottom of the real estate cycle, noting an upward trend and jumping in, even if it means paying slightly more, can translate into strong future returns.
The real estate market is not an exact science. A myriad of factors, including seller motivation, supply and demand, interest rates, employment trends and population growth can affect pricing significantly. A solid understanding of the real estate cycle, substantial market area research and the fortitude to get into the market can be hard for the individual, but when you work with Jimmy, you are working with a team of industry experts with your investing successful always in mind.
Leveraging Your Investment Capital
When you use borrowed capital to enhance the earning potential of an investment you are using the full benefit of leverage. When you invest in real estate you are choosing a tangible or hard asset, which makes financing more readily available to you. You are then substantially increasing the potential return on your leveraged real estate investment compared to a non-leveraged investment.
Leveraging Your Mortgage Financing
You are further benefiting from leverage when the rental income generated from your investment property is used to pay down your mortgage financing. The rental income earned by your property will typically be sufficient to offset your mortgage payments and all associated expenses for your rental.
Leveraging Your Time
When you choose to participate in the optional property management solutions offered by Jimmy , you are choosing to leverage your time to your best advantage and be aHands-Free Landlord. You simply make the decision to purchase an investment property and allow the professionals to do what they do best. You then benefit from owing a high quality investment, while not having to deal with the day-to-day tasks associated with managing the property.
Tax Advantages*
Tax Deferred Growth
Similar to an RRSP, the property value appreciation your investment experiences is sheltered from tax until you sell the property. For instance, if you purchase an $80,000 property that increases in value to $120,000, this gain of $40,000 is sheltered from tax until you sell. When you own multiple properties this benefit compounds since there is no limit to how much growth you can shelter with real estate investments.
Tax Breaks
When you do sell your property and thereby trigger a capital gain you will benefit from the capital gains status of this profit. This means that 75 percent of your capital gain is taxed at your marginal tax rate, while 25 percent of the gain is tax free! This 25 percent tax free profit can quickly add up when you own multiple .
properties.
Tax Deductions
Investment real estate allows for many tax deductions. The cost of financing and operating your property can be deducted from the income you earn. For instance, mortgage interest, property taxes, property management fees (if applicable), repairs and maintenance and other related expenses can be deducted from your gross rental income, thus minimizing the amount of tax you will pay.
* The specific tax benefits you will enjoy may differ from other investors, so be sure to consult your tax accountant for specific advice.
Cash Flow
A fundamental benefit of real estate investing is its potential to generate income, especially over the long-term as your mortgage is paid down. The income generated from your investment property will often be sufficient to offset your mortgage payment, taxes, condominium fees and other expenses, while still providing you with positive cash flow.
Your cash flow will be strengthened over time as you pay down your mortgage. These funds can then be used to supplement your retirement income.
Free Title Ownership
Your investment real estate purchase gives you free title ownership and control over your property. You benefit from the security of free title ownership of a tangible asset, just like your own home. With this control comes the ability to sell, refinance or hold on to the property as you see fit.
Wealth Creation
The equation is quite simple:
Mortgage Financing Reduction + Property Value Appreciation = Long Term Wealth Creation
Over time, strategically selected real estate investments can be powerful vehicles for wealth creation. It is that simple. The value of your investment property increases, while the corresponding mortgage financing is reduced nominally through regular mortgage payments. The result is increased equity and increased wealth.
Inflation Hedge
A long-term real estate investing strategy will effectively hedge against inflation by providing you with an asset whose value has historically increased at a rate similar to the rate of inflation. You are thereby ensuring that your “real” or “hard” asset will help maintain your wealth and corresponding standard of living.
Call Jimmy Today to Discuss Your Investing Options!
905-575-5478 (Hamilton Area) 905-639-5258 (Burlington)
" Your Success is my Priority !"
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