Real Estate As An Investment

The purchase of real estate often involves emotions which can influence the decision process. This is especially true if the investment is for personal use such as a home or recreational property rather than a rental income property.  Real estate also often represents a large portion of one's equity.  A general guidline is that net real estate equity after deducting your current mortgage balance should not represent more than 30% of one's assets. In applying the "rule of thumb", investors should consider the current estimated value of future pension payments, if they are members of an employer pension plan.

Real estate can act as a means of forced saving.  Paying down the mortgage over time increases your home equity and therefore your net worth.  For Canadian residents, there are currently no capital gains taxes when you sell your principal residence.

Lately, many people mistakenly believe that real estate never goes down in value and that it is the best investment available.

Below are a few different files which you can view to learn more about real estate.

Click here to learn how real estate has performed as an investment in Toronto.

Click here to open a worksheet to calculate what the impact of a change in interest rates can have on mortgage payments and to determine what portion of your assets real estate represents.

Click here to better understand real estate as an income generating investment.

Click here to see how real estate performs as an asset class.

In order to open these files you need to have Adobe reader installed on your computer. If you don't have this, you can install it for free by clicking on the link below.