Deciding to invest in a rental property is a complicated multi-faceted decision, which should not be taken lightly, however if done and done well it can be very lucrative investors. I’m writing this piece to discuss and clarify some of the advantages of investment real estate, but note there some negatives and before any decision is made, please be sure to contact myself or someone from my office to further review before any decision is made.
Advantages of Rental Real Estate
There are many investment vehicles available to investors today, targeting different markets, offering a wide variety of options and potential for growth. One investment which I have always been a great fan of is Investment Real Estate, especially now given today’s real estate market and super low interest rates.
The Current Interest rate environment means the carrying cost of a mortgage today is very affordable, even with real estate prices being so high. This combined with the surplus of high quality renters available, (as house prices continue to increase coming up with a deposit for a home, especially for a first time buyer is getting harder) and the lack of rentals available, this makes for a great investment opportunity for those with the means to advantage of said opportunity and receive several benefits associated with investment rental properties.
Cash Flow & Passive Income - This refers to the rent money that is left over after the mortgage and related expenses have been paid, cash that you did not have to work for, that was produced by your property investment. Cash flow is an added bonus on top of your capital appreciation.
Capital Appreciation - This is the increase in value of the property over time, though not guaranteed, if the property is researched and bought properly in stable areas, the property will likely increase in value over the years. This Capital Appreciation is magnified through the use of Leverage.
Leverage – Rental/Income properties can be purchased with borrowed funds, usually at very low rates, you invest a down payment and the rest is mortgaged, but you benefit from the appreciation on the whole property, regardless of the size of the mortgage. This benefit greatly magnifies your return on investment in a tax efficient manner.
Tax Efficiency – The best part about an investment property in the opinion of many successful investors, is the tax deferral on the capital appreciation of the property, no matter how much the investment grows in value, you don’t pay tax until you sell the property, in additional once sold the property is in most cases taxed as a capital gain, meaning its only taxed at a fraction of ordinary income.
Now one of the hottest places we've seen for investment has been Condo Pre-Sales. I've seen several and myself have had success with this strategy of investing in condo Pre-Sales for example the new project by Remington Developments called York Condos -
Near Highway 7, York Condos is located near the Rouge River. Nearby stores include Cineplex cinema, Panera Bread, RBC, Whole foods for the convenient factor, and Second Cup is just a short drive away.
Nearby schools include Unionville HIgh School, Montessori, Bill Crothers and it is in close proximity to York University's new campus.
With Close Proximity to all these amenities its great for families or Singles being so close to the highway.
For investors,York Condos is great for student rentals as monthly rent is about $1,200 and with the current low mortgage rates the ROI will be high. This will drive prices up and investors should act now as Government of Ontario just approved the new campus on May, 2015. There will be high demand for York Condominium units in the area.
The Remington Group is reputable development with several past successful projects, that completely sold out including Nexus South, North, IQ Condos, Signature Condos and more,all involved fully expect the same success with York Condos and it is expected to be another sold out project with large appreciation.
This exciting & Luxurious, new building is not yet available to the general public yet, but I am honored and excited to say, I have received access to this exclusive Pre-Sale offering and would like to share this privilege and great opportunity with you.
Please contact me immediately to learn more.
Email: Sabbir.email@example.com or
By Web: www.century21.ca/sabbir.chawala or
By Phone: (416)298-8383
These are all great benefits, but there are also risks associated with this strategy, so again be sure to let me help you take the proper steps to research and prepare properly before a decision is made.