In today’s finance minute, let’s talk about the three Profit centres in Rental Properties or Real Estate Investments. In a typical Investment, for example stocks, mutual funds or GICs, you profit from what your fund, stocks or GIC Interest rate makes. 

So your Profit comes from one Centre. In real estate there are three Profit centres – Cashflow, Mortgage Principal Paydown and Appreciation.

If your investment has Positive cash flow, meaning your rental income covers all your cost.  There’s your first profit centre.  Second, when you make your monthly mortgage payment some of it goes to interest and the rest goes to principal, effectively reducing the mortgage principal balance that you owe.  There’s your second Profit centre.  Finally, over time the value of your property goes up, hence your third profit centre is the Appreciation or the increase in the value of your property.  I work with hundreds of investors and they never regret the property they bought, they always regret the property they sold.

Real estate is not about timing the market it is about time in the market.

The longer the time horizon the better the appreciation.

Thank you for watching. and I love making positive lasting difference. 

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DISCLAIMER: The information in this post is solely advisory, and should not be substituted for legal, financial or tax advice. Any and all decisions and actions must be done through the advice and counsel of a qualified attorney, financial advisor and/or CPA. We cannot be held responsible for actions you may take without proper financial, legal or tax advice.

Karista Events & Workshops

We offer FREE educational events and workshops for First-time Home Buyers, Homeowners, Real Estate Investors, and a lot more!

Although we currently don’t have any scheduled webinars, we have an exciting opportunity for you to access our on-demand webinar recording. To get your hands on this valuable resource, we invite you to book a Quick Call with one of our Mortgage Strategy Managers. They will be delighted to assist you. Simply click here to schedule your call.

What: FREE Homeowners Workshop
When: Oct 10, 2024 (Thursday)
Time: 6:30 PM to 8:30 PM Pacific Time
Where: Online via Zoom
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What: FREE First-time Homebuyer Workshop (Online)
When: Nov 7, 2024 (Thursday)
Time: 6:30 PM to 8:30PM Pacific Time

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What: FREE Real Estate Investing Workshop
When: TBC
Time: 2:00 PM to 4:00 PM Pacific Time
Where: TBC
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