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Revenue Properties 

Buying a revenue property can make a big difference to your future. For example, if you are self employed you need to develop a long term plan that will act as a pension or retirement income. One strategy would be to have a large RRSP. Another may be to purchase many smaller properties that have good cash flow. Over a period of 10+ years your equity will increase and with a little planning you can be essentially mortgage free on those properties. You can then use the monthly rental income to act as monthly cash flow for your retirement years.

Some lenders will be more generous in using the rental income for qualification if you have at least 20% down; others will follow the new CMHC rules of using only 50% of the rental income and add this amount to your income for qulaifying.  

Don't limit yourself to investing only in your local region. There are many properties located in smaller communities that have a very strong cash flow because the local employment caters to out of town employees.

To determine your best strategy it is best to give us a call so that we can lay out which options/programs are available to you.

Revenue Property Reasons and Strategy

Most people know that real estate is a great investment. Over time it's a great way to build equity. In fact for most people, their home is their largest single investment. With the variety of equity financing vehicles available, homeowners can now take money out of their home and invest it elsewhere.

So why is it a great idea to invest in an income property?

The reasons are numerous.

Return on Investment: In the past real estate has always outperformed the stock market. Of course most investment professionals recommend that any investment portfolio be diversified.

Tax Advantages: All expenses related to the property are tax deductible.

A Pension for the future: Because many Canadians lack adequate pension income, an investment property is an excellent way to create income. When rental income covers all financing costs of the property you are actually having your tenants do the saving for you. When the financing is paid off you have a nice flow of passive income.

House your university age child: Many Canadians are sending their children off to other cities to attend university and housing them in their own revenue property. This saves on student residence fees and with the help of other student renter's help pay down the mortgage.

Home improvement: If you're handy and can use your own labor, investment in an income property is a great way to build equity. Improving a property that needs a facelift can produce great short-term results.  

Articles on investing in revenue property:

 

 

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