With the roller coaster effects in the stock markets, billions and billions of dollars of investment savings have been lost. Investment savings for many people, who were really counting on these savings as they neared planned, or early retirement have diminished significantly. Huge corporations have been closing or relocating to the U.S. with some pension funds literally disappearing.
How can we rectify losses for people who were heavily invested into stocks, bonds and mutual funds? The simple answer is not much. Playing the market comes with risks and a clear choice. You can buy and sell as a novice investor on your own or you can leave your money with the experts and hope that they can provide you with solid and consistent returns. Both ways there is risk and volatility and you have to be able to handle the ups and downs.
For those who are between 5-10 years from retirement and looking to build wealth, there is hope and we can certainly help you there. With values in most of our southern Ontario markets historically increasing anywhere from 3-8% per year, why would anyone want to risk their retirement money in the stock market? Real estate is a safe, low risk investment that offers tremendous upside potential.
Finding the right properties with the highest potential for growth will require help from a professional and experienced realtor, and the investment is in "bricks and mortar" of which you can see and feel. Establishing a close relationship with your realtor, who is clear on your investment strategy, is essential. Don't make your first mistake coming out of the gate! Buy with your head, not your heart!
How much can one expect an investment property to increase annually in value? Well, on average in a balanced market, you should expect to see annual increases anywhere from 2% - 6% growth per year, depending on interest rates and inflation. You should also realize the benefit of someone else actually paying down your mortgage loan and after 4 or 5 years, the mortgage balance really starts to reduce quite substantially (look at an amortization chart).
Perhaps the most overlooked benefit of owning an investment property is that you are seeing your 2% - 6% returns on the entire value of your investment property when most people have only about 25% total cash invested. That would equate to quadrupling your cash on cash returns alone.
Now if you were to look at an investment period of 10 years, I would recommend attempting to purchase an investment property every year or 2. Especially now while you have the benefit of buying affordable properties at such low interest rates.
Real Estate is in my blood and helping people realize their dreams has been my passion. Invest wisely! If you have any questions or need some help in finding the right investment property for you, call Adam Campbell, Broker of Record, Advantage Plus Realty Corp. Anytime.
Adam Campbell is the Broker of Record and Owner of Advantage Plus Realty Corp. and is a member in good standing of the Ontario Real Estate Association (OREA), Canadian Real Estate Association (CREA), Oakville Milton & District Real Estate Board (OMDREB), Toronto Real Estate Board (TREB), and the Realtors Association Hamilton Burlington (RAHB). Adam Can be reached anytime by calling his office at 905-844-4444 Ext. 201.