The age old question came up in a discussion at a dinner party this past weekend… ”I heard that buying a home isn’t actually the best investment, is that true?”
My answer was “It really depends on what your intentions are. What are your intentions?”
The persons response was not a surprise, she answered with “Well, to grow my investment portfolio!”
Now let’s get to the “Meat & Potatoes”, shall we???
I think you’d agree that 10% is better than 5% in returns on your money, right?
Now most bonds return a 5% yield, and that is a good investment, but again it really depends on what your intentions are… Bonds are a safe investment however the safer the bond investment the lower the return on investment! So do you want to be safe or do you want to grow your money?
Oh! Did you say BOTH???
Then Real Estate is the best option, Real Estate can be just as safe as bonds if it’s carefully selected and properly valued. Bonds pay a fixed rate of interest through the entirety of the investment, which means that with inflation the purchasing power drops as inflation rises!!!
When you invest in Real Estate rental properties, it’s important to know that the value increases with inflation and your mortgage payments don’t, therefore rents are escalating and your mortgage payments aren’t… This means more cash flow for you! You can raise your rents and continue paying the same amount on your mortgage payments! (Depending on how long of a term your locked in for) In addition to higher inflation, you could be faced with more renters on the market. More renters on the market means a higher demand for renting your property! If it doesn’t sound like a good investment yet, keep reading!!!
Leverage is another component of Real Estate investing that is talked about but not everybody understands it. If you’ve paid down a significant amount on your home/Real Estate, and you’ve got approximately $100,000 of equity in your home a lot of people would buy another home with that $100,000 as a down payment for another property. Another option is to use that money as a down payment on 3 separate properties, which stands a greater chance of increasing your overall return on that $100,000!
If you’re intentions are to increase your quality of life and get a significant return on your money while you stay on top of the rise of INFLATION, then I can assure you that REAL ESTATE IS THE BEST INVESTMENT!!!
Manjit Virk
Sales Representative with Signature Service GMAC Real Estate
www.manjittorontohomes.com
No related posts found
