Real Estate Investing
At Hogenhout & Associates, we believe real estate is your way to wealth. As such, we provide unique investment opportunities for businesses and individuals to increase their net worth and build investment portfolios through the utilization of income producing real estate properties.
Why Real Estate?
Residential real estate is one of the most profitable investments an individual can make. Real estate is often overlooked in the quest for tax reduction and deferral, let alone income generation and inflation protection. If real estate is all of these things, why doesn't everyone own a rental property? The answer is simple - money. It's not that investors don't have the money to get into the rental property market, because this can be easily accomplished with leverage and minimal monthly carrying costs. The problem is there is simply no money to be made by financial professionals when it comes to rental real estate. The result is that rental real estate is a secret tax shelter that few people ever consider. Investment advisors sell stocks, bonds and mutual funds. Insurance agents sell insurance policies. Accountants sell tax preparation services. Real estate agents sell real estate, but they tend to sell real estate from a vendor to a purchaser to be used solely as a principal residence. So rental properties ends up being a golden goose, elusive, yet attractive.
Think about this. The original property game we know today as Monopoly was actually invented back in 1903 to expose the unfairness of a social system where a small minority of landlords took advantage of the majority of tenants. What the game of Monopoly tells us, contrary to its investor's intentions, is that it is smart to own property.
Rental real estate has been described by some as the equivalent of a super-charged RRSP. What is a traditional RRSP? It's a tax-deferred savings vehicle; contributions are tax-deductible; it provides a future income stream; and it's an investment asset. Rental real estate incorporates all of these features, plus there's no pre-determined maximum tax deduction limit like with RRSPs; withdrawals are forced at age 71 like with RRSPs; contributions can be financed and the interest can be deducted, unlike RRSP loans; and the taxes paid on selling a rental property are at the 50% capital gains tax rate, unlike RRSP withdrawals which are fully taxable.
It is important to understand that real estate investing should be considered a long-term investment instead of trying to make a quick profit by "flipping" a property (I consider this to be "speculating"). Prudent residential real estate investing is a very sophisticated process with the objective of creating a long term asset base that will fund you for years and years. A long term view is mandatory. The poor think day to day, the middle class thinks month to month, the rich think decade to decade. When you stick with the basics of real estate investing everything else falls in place; basics like fundamentally good neighbourhoods and fundamentally good properties are the building blocks of a great portfolio over the long term. At Hogenhout & Associates we help you build a sound and solid portfolio of real estate investments.
