Be an Investor. Not a landlord.

Real Estate Investing, Coaching & Education

Slider
06 Aug

The 5 Streams of Income

Congratulations to Ryan and Samantha from Ajax for purchasing their very first Rent to Own property. The property that they purchased is a beautiful town house located in Courtice which is definitely a community on the rise. We were able to fill this property in three short weeks and received $6600 for their down payment plus first month’s rent.

At first, Samantha had doubts about rent to own. After coming out to one of our seminars and getting a better understanding of how the program works, both Ryan and Samantha decided to take action and it paid off with great results. Personally we’ve had our eyes in this area for a while and it continues to be one of our favourite cities to invest in.

So what makes a city a good investment?
There are a number of key factors to consider…. the population in Courtice continues to increase at a great rate. The increasing transportation plans to that region including the 407 and the expansion of the GO. With this continued expansion it naturally brings businesses, capital and most importantly jobs to the region.

A great site to visit for some great information is Stats Canada. We’re big on this site, as it provides on with informative information when we’re deciding on purchasing an investment property.

Now, if you’re not familiar with the different streams of income that our investment strategy brings us and our investors month to month…. year to year, have a read below.

Remember, when investing, the key is not to speculate but to get into an investment that will bring you cash flow during good times and bad.

The 5 types of cash flow to help you start creating multiple streams of income.

1. Down Payment
Prior to our tenants moving into any of our beautiful homes, a down payment is required. This down payment range is price. For most of our homes we’ve received anywhere between $5000 up to $20,000 up front payment.

2. Monthly Positive Cash flow
With the low interest rates and years of amortization most of our rental properties are bringing in a minimum of $300 cash flow each month.

3. Mortgage Loan Reduction
I also call this Equity Build Up. What I’m referring to is each and every month your tenant pays you rent, they are paying down your mortgage. Let’s say on a home that cost you $250,000, at the current interest rates, the loan reduction monthly could be in the range of $300 – $500 a month. Every dollar in loan that is paid down is wealth to you.

4. Appreciation
Each year you own this rental property, its value will continue to increase. If your $250,000 home appreciates at 5% a year, your home would be worth $262,500 after the first year you owned it. That $12,500 increase is another income stream. If I divide this $12,500 increase by 12 months, it would amount to approx. $1,040 each month.

5. Tax Savings
At the end of the year, your rental property will show a loss on paper for tax purposes. How…. The reason is that the CRA allows you to include a number of expenses throughout the year that can be included on your tax return (for more information on deductibles, refer to our newsletter from Feb 2nd). Let’s say that the tax reduction saves you a $1000 in taxes…. divided by 12 and that would be $83 a month.

Gary Hibbert

Leave A Reply

Your email address will not be published. Required fields are marked *

Ready to Connect?

Fill out our form and we will get back to you as soon as possible

Smart Home Choice Inc.

P.O. Box 51109
Rossland/Harwood
Ajax, Ontario
L1T 4S0 Canada

289-660-4770
1.888.767.4045
investor@smarthomechoice.ca

HST #816657050RT0001