HOW DO I WIN IN REAL ESTATE?

Author: Boychuk Mortgage Group |

  • Remember the FOUR benefits to investing in real estate: Principal Pay Down
  • Unlike your rent payment, mortgage payments include a principal component that otherwise brings your total monthly mortgage balance owing down, & therefore your equity up.
  • Appreciation
  • Appreciation refers to the increase in your home’s value over time. Your home value may increase for a number of reasons, including, interest rate fluctuations, supply & demand, inflationary periods, & even emotional buyers shifting the market.
  • Cash Flow

Whether you’ve purchased a stand-alone rental property or have a rental component to your home, this secondary source of income (ideally above & beyond your total monthly bills) provides great value.
For Example

  • Rent = $2,500
  • Mortgage = $1,500
  • Expenses = $500
  • Cashflow = $500
  • Sweat Equity
  • Sweat equity refers to the physical improvement of upgrading your home through renovations.
  • Let’s look at a simple example:
  • Based on consistent payments at a rate of 2.59% over 25 years with 5% down ($25,000) & a 2.5% conservative annual appreciation.
  • TODAY
    • Purchase Price = $500,000
    • Mortgage Balance = $494,000 - with mortgage loan insurance
  • In 5 Years
    • Value = $565,704.11
    • Mortgage Balance = $418,983.89
  • 5-year estimated property value = $565,704.11
  • 5-year principal pay down = $75,016.11
  • 5-year earned equity = $121,720.22 - includes day one loan insurance premium
  • 5-year equity outlook = $146,720.22

Remember – It’s time in the market that builds WEALTH in real estate!



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