Do you want to create income today and when you retire?
We define Financial Independence as the point when your passive income is enough to handle all your expenses. Real estate benefits from multiple income resources and Avail Properties Inc. makes owning real estate as passive as possible for you.
Owning income generating real estate is the safest path to creating wealth. It is one of the few investments that keeps pace with or even exceeds inflation. Despite cyclical ups and downs, over the past 50 years, real estate values have gone up 3.82% annually. During 2014, in Edmonton and Lethbridge the average appreciation was 11% Many neighborhoods consistently perform even better.
Fee report on where to buy real estate in Canada vs. US:
This is an approach that takes control of investments, not waiting for outside occurrences to happen. Our knowledge helps unlock the hidden value that specific renovations, re-zoning, quality marketing and investment in areas of gentrification, improved infrastructure and transportation will bring. We can create large returns through expertise, hard work, market intelligence, and negotiation.
Appreciation gains are the building blocks of wealth by providing funds to reinvest. A line of credit can be established to use towards additional investments.
Three Income Sources: Cash Flow, Inflation & Mortgage Pay Down
The difference between rental income and property expenses represents your cash flow. As rental income is continually upwardly adjusted for inflation, and the mortgage is paid down by the tenant, the spread between the revenue and expenses widens, resulting in higher cash flow. Once the mortgage is paid off, you are left with a clear title to a property that will continue to generate income until you sell it.
Increasing Profits through Leverage
The power of leverage makes your money go further. You earn a return on the bank's money in addition to your own.
Example: If you have $120,000 to invest, you can use it to purchase $120,000 worth of GICs, stocks, Mutual Funds, etc. or $600,000 of real estate!
This is because you can't typically leverage (a loan) to buy stocks, meaning that your $120,000 is worth just that. But, since the bank will give you a mortgage on a rental property for only a 20% down payment, you can split your $120,000 into 2 separate investments work $300,000 each! You benefit from the gains of $600,000, not just the initial $120,000.
Fee real estate vs. stock market report:
The bank contributes most of the money to purchase real estate and when you add cash flow, mortgage pay down and inflation protection, it's easy to see why people become very wealthy investing in real estate.
Real Estate tax advantages help you keep the money too.
The advantages described below are common to many properties, however, each individual investor's objectives and circumstances are unique. It is important for you to meet with an accountant to explore the benefits and opportunities specific to your own individual situation.
With real estate, you can cash out a portion of your profits without incurring taxes if you refinance the property with a new mortgage and then reinvest the tax-free profits into a new mortgage.
Real estate profits are not taxed until you sell the property. For example, if you purchase a home for $300,000 and it appreciates to $450,000, the $150,000 gain is protected from taxes until you sell the property. The allows your investments to grow tax-free year over year, further compounding its worth.
Capital Gains Tax Treatment
Because real estate appreciation profits are treated as capital gains, only 50% of your gains are taxed. In contrast, interest earnings from investments such as bonds and GICs are taxed on the full 100% of the gain.
Tax-Free Cash Flow
For tax purposes, positive cash flow generated in excess of your expenses can be offset by capital cost allowance (CCA). CCA is an accounting term for depreciation due to the building's physical wear and tear. By employing CCA write-offs, your positive cash flow remains tax-free until you sell your property. The ability to defer taxes on this profit center is a significant advantage for real estate investors.
Financing and operating costs such as mortgage interest, property management fees, property taxes and repair & maintenance can all be claimed as deductions against rental income, further reducing the tax burden.
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