There are many benefits to investing in real estate. The value of an investment property could increase typically faster than inflation, could also allow more control than other types of investments and can provide a regular stream of rental income at the same time.
Earning an income on an Investment Property
Though you’ll have to produce the down payment from your own savings, the majority of the investment property will be paid for through a mortgage loan. For example, if you put down $40,000 on a $200,000 property and borrow the remainder, you would generate income off the full $200,000 investment and not just on the smaller amount you personally invested. In essence, you will be generating income off the borrowed money. If you are renting out the property, your tenants will be paying that mortgage off for you. That means even more money in the bank for you.
Many people want the security of knowing they have a pre-approved mortgage before they go house shopping. Having a pre-approved mortgage helps you focus on looking at houses you can afford and provides the security of knowing you meet the financing requirements of the home you are trying to buy.
An Investors Group Mortgage Planning Specialist can help you find a mortgage that will work the best for your lifestyle, budget and specific retirement goals. When you consider buying your first home, purchasing a new home or even refinancing, it’s important to first understand the mechanics of your mortgage. Need more mortgage advice? Read “What type of mortgage should you get?”
Benefit from Tax Deductions
You will be able to benefit from tax deductions on reasonable expenses incurred to generate your rental income. The Canada Revenue Agency generally allows landlords to deduct the cost of:
- insurance on the property
- advertising the property
- lawyer and brokerage fees
- necessary bookkeeping or tax preparation fees
- salary of a property manager or anyone else you might employ to maintain or provide services to the property
- maintenance and repair costs
- property taxes
- cost of providing utilities in your rental agreement(s)
Here’s more information on expenses you can deduct on your rental income.
Getting Started
If you’re interested, the best place to start is by contacting Sunshine Pawchuk at the Investors Group. She will review your situation, discuss your goals and help you figure out the best option for you. She can also help you go over your other retirement savings and discuss a solid plan for your retirement savings.
Then it’s time to start shopping for a property! Property Advisors are a team of experienced realtors and rental property managers in Edmonton that can help you find the investment property that will help you meet your long term goals.
Rental Advisors offers full property management services in Edmonton. From advertising your investment property, screening tenants, rent collection, dealing with tenant disputes and other issues to managing property maintenance and improvements; you won’t have to worry about a thing!
About Sunshine Pawchuk
Associate Consultant with the Julian Romanko Team at Investors Group
Sunshine Pawchuk is financial advisor with Investors Group Financial Services Inc. She specializes in investments, retirement planning and protection strategies. Sunshine provides a highly customized approach for investors which allows clients to build and retain wealth for present and future generations. She helps clients with a multitude of investments and builds them a personalized financial plan to meet their individual goals.
Sunshine has over six years of experience in the high net worth space of the investment industry. She comes from Morgan Stanley in the US, the largest investment institution in the world. In addition, she worked at a boutique private wealth management firm where their expertise accredited investors and alternative investment strategies. She is a graduate of the University of Nevada, Las Vegas with a B.S.B.A in Finance and represented her university as a competitor in the financial Global Research Challenge 2010-2011. She has served as the CIO for the student managed mutual fund, the Rebel Investment Group, where she showed her skills as a leader with making top level decisions on the fund’s direction and investments. She is now back in Canada where she intends to stay and service clients in the Alberta region.
Contact Sunshine at sunshine.Pawchuk@investorsgroup.com or call 780-459-3343.
Investors Group Trust Co. Ltd. is a federally regulated trust company and the mortgagee. Mortgages are offered through I.G. Investment Management, Ltd. Inquiries will be referred to a Mortgage Planning (Agent) Specialist.