- Use the money sleeping in your home (equity) to grow it in one of your investment accounts.
- Use the money that sleeps in your house (equity) to make it grow in an income building!
- You don’t have a mortgage! Investment Loan Solution
Julie and Alex have a house worth $400,000 and a mortgage balance of $220,000. They increased the latter to $320,000 and borrowed an additional $100,000 against their mortgage.
(The maximum allowable for this type of transaction: 80% of the market value of your property)
Why borrow $100,000 on your mortgage?
- Very low interest rates!
- Use of this money as a down payment for a 5-unit multiplex worth $600,000.
- By withdrawing this amount from their home to make an investment, they can deduct this part of their tax.
Are you interested in real estate investing to increase your wealth, but managing tenants and costs are holding you back? Many of our clients have taken equity amounts to contribute to their TFSA. A client increased her mortgage by $40,000 to invest in her TFSA.
Variable interest rate on the $40,000 loan: 2.95%
Average return for 10 years of our investments in your TFSA: 13.04%
This strategy greatly accelerates your earnings, as your investment increases in value on a large amount. Example: 10% return on a $100,000 investment = $10,000 vs. 10% return on $1,000 = $100.
You don’t have a mortgage?
Do not panic ! You can borrow to invest with a financial group in order to carry out the same strategy as the couple in the previous example.
➤ A loan starting at $10,000
➤ Competitive interest rates starting at 3.7%
➤ Attractive taxation, such as the reduction of your taxable income,
because the interest on the loan is tax deductible
Conclusion
The interesting point of the 3 strategies is the leverage effect!
With little capital, you can borrow to multiply your purchasing power and increase your investments.
Is this a strategy that you plan to put in place?
Contact the authors of the article ici!
Have a good day !
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