It is said that real estate is the safest investment option and for good reason! Let’s say you purchase a rental property. You rent out the property for 10 years. Over those 10 years, the value of the home stays the same (which is unlikely, it will almost always increase) and the rent you collect just allows you to break even after mortgage payments and expenses. After 10 years, with the rental income covering the mortgage payments, you have still realized a 9-11% annual rate of return on your 20% down payment just from the principal pay down of the mortgage! Alternatively, let’s say the property appreciates in value at 5% annually over the long term. That equates to a 25% annual rate of return on your 20% down payment!
The easiest way to start to build your own real estate investment portfolio is to use the equity available in your principle residence. Did you know that every $100,000 in accessible equity in your home can fund the required down payment to invest in $500,000 worth of rental property? $150,000 = $750,00, $200,000 = $1,000,000, etc! This is a great way to put your existing equity to work to build a strong and secure investment portfolio.
The key to success when it comes to real estate investing is to work with a team of experienced professionals who can provide you with the best possible financial advice and help you build a mortgage plan that is tailored to your needs. Ranked in Canadian Mortgage Professionals’ Top 75 Brokers in Canada for each of the last 3 years, at Synergy Mortgage Group we feel that educating homeowners on the power of using the equity in their home to accelerate reaching their financial goals is an important part of what we do. We do this by showing them the benefits of investing in rental property and earning a long term rate of return of 25-40% annually on their investment.
– Josh Perez, www.synergymortgagegroup.com