Why Investing In Income Property Will Help You Increase Your Wealth?

By Author: Income Property
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Throughout the ages every major civilization has held one constant to be true; the need for shelter! If history has taught us anything, it is that the great land barons and land owners of the day were always the wealthiest! Now that might not always be true today, but it is fair to say that real estate has created more millionaires and multi-millionaires than any other industry. Even if you feel that last statement is farfetched, real estate has definitely helped more average people ease the financial burden of everyday life than any other legitimate business. The problem with most people is that they only view real estate in two dimensions, either they are purchasing a home or selling a home "also known as your principle residence." Although that is still true, there are so many other ways to generate income from properties and benefit from real estate.

The First method, which you all know is that of renting and becoming the dreaded Landlord! This method is as old as time. There are a lot of advantages to legally renting a space, the tax incentives alone can make it worthwhile as you can offset the cost of mortgage ...
... interest, not to mention all expenses associated with renting that space and also depreciating the unit (CCA-Capital Cost Allowance). The key thing here is to net positive cash flow, so after all your expenses are paid you should be making a few dollars. Now you must remember that you will not be making a lot of money in the short run, but you will be accruing wealth for the long haul. In addition, when you decide to sell of the property, you are only responsible to pay capital gains tax on half of the appreciated value of the property (eg: you buy for $200,000 after 10 yrs the property is worth $300,000, only $50,000 is taxable!

The Second method, not as widely known but still very affective are assignments. Assignments are not usually published by new builders, but if you are fortunate enough to be able to capitalize on them they can be a relatively safe way to get an ROI (Return on Investment) of 50-100% on your money very quickly! Let me clarify, if you are able to find a property in a highly sought after area and after putting down your initial deposit, you are hedging on the fact that the property will appreciate and you will be able to sell your unit before the close date. In effect, you are buying low and selling high by assigning the rights to your Purchase Agreement to a new buyer at whatever rate you feel appropriate (usually slightly less than the current market rate.) (eg: Purchase price of new condo $200,000, deposit required $20,000. Closing date is 18 months away. In 17 months current market value of your unit is $225,000. You decide to assign the rights to your unit to a new purchaser for $220,000. You have just made 100% return on your investment because you put down $20,000 and you were able to sell the unit for $20,000 more, you save even more by not having to pay Land Transfer Tax and realtor commissions if listed after close.

Whether you're getting the inside scoop from Income Property Insider or any other resource you should always be questioning the validity of the information you are getting. What we at the Income Property Insider do is provide real world experience backed with practical knowhow. We have spent many years acquiring the knowledge and skill sets required to make good choices in this business, what that means is that not only have we made money in this business, but we have also lost money as well. Now you may be asking why you should listen to anyone who has lost money investing! The reality is that anyone that has ever made any real money in this business has lost some money at some time. It's the lessons learned from those challenges that help direct us to look at only profitable opportunities!
If you're looking for expert Income Property advice especially in Toronto then please visit Income Property Insiders.