Protecting your net worth is a prudent course of action regardless of the status of the Canadian economy, global markets, or stock market. We will discuss how London Ontario Real Estate may not only safeguard your money from shrinkage and inflation, but also produce additional – read more to find secrets on wealth building from Yasir Khan.
Yasir Khan is a RE/MAX real estate agent that specializes in London Ontario Real Estate. Please don’t hesitate to contact me if you have any concerns regarding London Ontario real estate, MLS Listings, buying or selling a home in London, or mortgage-related inquiries. Click here to contact us about London Ontario real estate.
Investing in London Ontario Real Estate
Rather of stocks or bonds, real estate may help safeguard your net worth from inflation. When inflation comes in, stocks, bonds, and other equity investments may lose value. As a result, your net worth drops and your purchasing power decreases.
London Ontario Real Estate is one of the few investments that remains proportionate to inflation. When inflation kicks in, landlords raise rents, and property prices usually follow suit.
As an example we can look at how inflation affected residential house prices in London between 2016 and 2021. Lets suppose you bought a home for 100,000 in the beginning of 2016 year. Due to factors related to inflation and demand in housing in the London Ontario real estate market – prices of homes have almost tripled.
If you have any more questions about real estate investing in London Ontario, Yasir Khan of remax will be delighted to assist you. Please get in touch with us right away if you have any queries.
Residential real estate is a special investment since it is one of the only assets that can meet people’s basic requirements. A house, unlike luxury items such as gold or intangible riches such as equity, is a form of need. It might meet a need rather than merely satisfy a want. It will always have a monetary worth.
Although no one can predict with precision where the market will go, it is plausible to infer that residential real estate will always be valuable since people will always want to possess good homes.
London Ontario Real Estate is a Good Deal
Real estate might be better for your net worth in the long run than stock investments. You might be asking how this is possible if real estate appreciation underperforms stock appreciation plus dividend income.
We can see how real estate may be a better deal if we consider all of the variables and put the investment into context. Let’s look at two different forms of investments: taking out a mortgage and borrowing money from a stock broker. The higher the quality of these investments, the more safe your net worth will be.
Real estate investing has shown to be a better investment for many people. For one thing, the cost of borrowing money to buy a home in London is very cheap. Let’s assume you purchase $500,000 for a property in London and put down a 20% down payment. If the property appreciates at a rate of 5%, your return will be 25%. Between 2005-2016 on average a home appreciated 5% and between 2016-2021 the numbers have been far more significant.
When you buy a home in London, you own the investment. Even though you owe the bank money in the form of a mortgage, the property is yours and you may do anything you want with it. When you decide to sell, it is entirely up to you. You could be compelled to sell your stock at an inappropriate moment if you own it as a stock. Selling at the incorrect moment might reduce or eliminate your profit margins.
Your London Ontario real estate, like other financial assets, may help you develop and protect your net worth. You don’t have to sell your home to make a profit, unlike equity. You may earn double-digit returns on your investment as a landlord. One you earn appreciation based on your investment and second someone else is paying your mortgage and income from the tenant.