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- Aug 30, 2007
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Too much negative Covid fear mongering? Delayed tenant payments ? Tight cash flow? Fear not: Why housing is still a great investment.
According to the CMHC, average Canadian house values have increased by over five per cent annually over 25-year periods going back to the Second World War. That includes the 2008 global financial meltdown when predictions for a housing market collapse never materialized in Canada or currently during Covid crisis where wide spread price collapse too didn’t happen.
With 20% down an annual avg appreciation is 25% annual ROI cash on cash - tax free if personally owned or tax preferred if held as a rental. Very very tough to impossible to get in any investment.
https://www.bnnbloomberg.ca/why-housing-is-still-the-best-investment-for-most-canadians-1.1442476 market collapse never materialized.
Add mortgage pay down of another 2%/year or 10% on your invested money and it’s looking pretty amazing - if you can cash flow ie hold long enough with that kind of leverage. As such aim for 25% or 30% down for longevity [as cash flow with 80% leverage is very tough today] and to have sufficient reserves for R&M and occasional down periods like right now.
I realized this about 20 years ago when CMHC was routinely handing out 85% mortgages. Not quite as juicy today - but still decent.
Bon chance !!
Thomas Beyer, Asset Manager, Investor, Community Improver, Author, Father, Mentor www.prestprop.com
According to the CMHC, average Canadian house values have increased by over five per cent annually over 25-year periods going back to the Second World War. That includes the 2008 global financial meltdown when predictions for a housing market collapse never materialized in Canada or currently during Covid crisis where wide spread price collapse too didn’t happen.
With 20% down an annual avg appreciation is 25% annual ROI cash on cash - tax free if personally owned or tax preferred if held as a rental. Very very tough to impossible to get in any investment.
https://www.bnnbloomberg.ca/why-housing-is-still-the-best-investment-for-most-canadians-1.1442476 market collapse never materialized.
Add mortgage pay down of another 2%/year or 10% on your invested money and it’s looking pretty amazing - if you can cash flow ie hold long enough with that kind of leverage. As such aim for 25% or 30% down for longevity [as cash flow with 80% leverage is very tough today] and to have sufficient reserves for R&M and occasional down periods like right now.
I realized this about 20 years ago when CMHC was routinely handing out 85% mortgages. Not quite as juicy today - but still decent.
Bon chance !!
Thomas Beyer, Asset Manager, Investor, Community Improver, Author, Father, Mentor www.prestprop.com
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