Which would you rather have?
- Thread starter Marla
- Start date
ROI = Both... myself and clients (some more then others depending on which markets and amount of disposable capital)
Wait a second... when I read that comment I figured this dude lived somewhere desirable like Wasaga Beach or Muskoka. He lives in Oshawa??? And he called Toronto a shithole??? :rofl:
As far for the OP's question... the money for sure. From an investment point of view, the power of investing in real estate really just comes down to the ability to leverage. If you don't have that, an investment portfolio smokes real estate returns. And I'd have a lot of fun with $2mill anyways.
I would hope you can get a better return than 5% if you had 2 mil cash to invest. I'm wondering also about the property tax on a 2 mil home.
MPAC takes the average home sales within an area of the home and bases their assessment for property taxes. On a $2M home its about $9K-$13K... then the government(s) go and waste it.
The house all day long. It is a tax free asset.
You need a roof over your head anyway. You can always borrow/leverage your house for investment purposes. As long as you are disciplined.
Although I think we are getting close to the peak of the real estate cycle.
You need a roof over your head anyway. You can always borrow/leverage your house for investment purposes. As long as you are disciplined.
Although I think we are getting close to the peak of the real estate cycle.
Sorry... but I just have to BUST your bubble on this one... so you know.
Having a house, especially a multi-Million dollar house is not a tax heaven... By definition of a tax heaven... you are NEVER taxed.
With real property, you are taxed every year. Add to this YOU must maintain your property or your neighbours will complain to the city...thats comes at a cost as well.
Years ago, there were families that were not well off and won $5 Million dollar home and had to sell 2 years later as they could not afford the property taxes, upkeep and utilities.
Let me know when you can own a home and NEVER pay taxes.. I have 1,000+ people that will jump at the chance to buy up the properties.
Leveraging is why the US economy took a nose dive during their financial crisis.
You do not have to pay Capital gains taxes. Obviously you have to pay land taxes.
Whether you own or rent you are still paying land taxes, utilities and upkeep. Smart landlords have all that covered in the monthly rent amount.
Easy come easy go. If you're not good with money when you have very little, you won't be any better when you have a windfall.
Leveraging to buy fancy cars, silly renovations and crazy vacations is why a lot of US citizens found themselves underwater.
Borrowing against ones assets to invest in appreciating assets, is a quicker way to wealth than having your money sitting idle losing value due to inflation.
Whether you own or rent you are still paying land taxes, utilities and upkeep. Smart landlords have all that covered in the monthly rent amount.
Easy come easy go. If you're not good with money when you have very little, you won't be any better when you have a windfall.
Leveraging to buy fancy cars, silly renovations and crazy vacations is why a lot of US citizens found themselves underwater.
Borrowing against ones assets to invest in appreciating assets, is a quicker way to wealth than having your money sitting idle losing value due to inflation.
You have to pay capital gains taxes on an investment property when you sell. I'm not sure how this affects vacation homes or cottages since they aren't your principal residence. You don't pay capital gains on your principal residence.
http://www.moneysense.ca/columns/can-you-avoid-capital-gains-tax
Denmae was referring to a Primary residence that is not taxed.
Going back to Marla's question... $2M cash will win EVERY time because even if you have Multiple Offers, you may not like the condtions of sale and still have to wait and ensure the closing goes smooth before you will see any of the proceeds (Sale Price - RE Agent commissions - RE Lawyer Fees)... so you could potentially still end up with less than $2M after everything is completed... meanwhile the $2M cash could be earning interest or capital gains
Capital gains is only paid if sold within 1 yr of purchase/acquisition and it wasn't your primary residents.
As for the question. Depends if it's lottery or inheritance.
It is my understanding A person comes out ahead if it's inheritance with a house over cash. Leverage the house for investments. Never exceed what your current standard of living is thus always allowing yourself to live within your means yet increase your earning potential and net worth.
Lol....exactly......to put it kindly...neither would be on anyone's top 10 places you'd want to live if you had a couple million bucks. Lol
Capital gains tax is always paid on an investment property. Doesn't matter how long you have it. The longer you have the less you will pay though.
In the US, they can defer paying taxes, if the proceeds are rolled into another property. I believe this is called a 1031 exchange or something.
It would be great if that was the case here in Canada, as many landlords would sell some of their holdings and reinvest. This would open up opportunities for the up and coming investors.
I did qualify my comment as primary resident.
Defering taxes just means they pay more the next yr. Can't pay next yr, oh well the bank and county say, now let's have the keys to your house.
Makes no sense. never lose it to stupidity
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