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My Top 3 Reasons Why Investing in Property Can Increase Your Net Worth

26 February 2018
Kevin Hartley

The Top 3 Reasons Why Investing in Property Can Increase Your Net Worth

Regardless of what stage you find yourself at in life - retirement, a recent or soon to be graduate - you have probably thought about how to increase your net worth. Perhaps you have tried investing in the past; stocks, bonds. But, have you considered a more substantial investment? I'm talking about investing in real estate as part of your portfolio.

I'm going to give you a look at a few reasons why investing in real estate is a practical course of action if you hope to see your net worth grow.

Reason #1: It Provides an Avenue for Passive Income

Who doesn't love passive income? I'm talking about not selling your hours for dollars and having something that can be bringing in revenue while you're sleeping or on vacation, like a rental property. This is hands down the number one reason to add some real estate to your portfolio. Whether you choose a single-family home, a condo or a whole apartment block, in the current east York and Toronto markets, you're almost guaranteed to find interested tenants. Now, it won't all be pocket money, as a portion of the rent will cover your costs for owning and operating the rental property, but the rest of it you can pocket.

Reason #2: Property Values Appreciate Over Time

One huge plus about real estate is, even in our current dynamic and shifting market, that it almost always increases in value as time passes. It is for you to maintain the property, invest in necessary improvements and repairs, but it is very likely that it will be worth more in the future (think 5-10 year cycles, not next year), should you decide to sell it. Bear in mind that real estate is cyclical and there will be better, best and worst times to sell, so make sure you're tuned in to the market with a great Realtor so as not to miss the perfect time to see your investment come to fruition.

Reason #3: You Can Use the Equity to Buy Other Properties

It takes money to make money, as they say, right? Well, that is the final reason that I think real estate is such a great way to build your net worth-you can use it as leverage to buy more and continue to you're your real estate portfolio. As a simple math example, let's imagine that you purchase a property for $100,000. Once that mortgage is paid off, or as it appreciates, you'll have an asset valued at $100,000, or appreciated equity, that you can tap into as collateral for an additional loan.

Having this asset puts you in a position to acquire more real estate which can then further increase your net worth. It is easy to see how this is able to scale over time to your benefit.

To discover more about investing in real estate, or financing with a mortgage or home equity to expand your investment options, just give me a call. I'm happy to share my knowledge and expertise as well as give you the best advice to help you reach your goals.

Thanks for reading. Questions or ideas for a future blog? Feel free to contact me here.

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Kevin Hartley, Broker is a Toronto based real estate Broker with Better Homes & Gardens Real Estate | Signature Service, Brokerage. @Home is his lifestyle blog, an expression of his passion for home keeping though MAKING (Recipes), DOING (DIY), BEING (Health/Wellness) and DWELLING (Home Ownership, Sales & Maintenance).  Content not intended to solicit clients under contract.

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