Photo Flickr user: inacentaurdump
Good news! My mortgage application has been approved and I’m going to be able to tap into some of the home’s equity and pull out some extra cash. This is incredibly good news, you see. Both of my rental properties are currently up for sale and my projected ‘net income’ (before capital gains taxes) would be no more than $20,000. With my new mortgage I’m able to access more than $25,000 in cash without any tax implications (until I sell). On top of that, I’ll actually double the monthly profitability of the building, keep my assets, and the passive cash-flow. Oh, and of course the head-aches, but this stuff doesn’t happen without some effort.
This dream scenario is possible because I bought the building with 100% financing three years ago. That meant I traded a down-payment for an exorbitantly high interest rate of 7.35% with Xceed Mortgage. This is a self-insured mortgage, meaning that CMHC didn’t provide the insurance for this high-ratio mortgage, Xceed did. I still had to pay an insurance of sorts in the form of a ‘fee’ that roughly equaled what I would have paid CMHC. This high ratio mortgage, on a 3 unit rental property, that was not owner-occupied would never have met
Read more…
Steve Cash-flow, Financing, Rental Profit, Rental Property Financing, Interest Rate, mortgage, Mortgage Payment, Profit
So Rent Day has gone from my least favourite day of the month, to the best. Since buying my first property I’ve stopped paying rent and started collecting it. There’s nothing like going to the bank machine and dropping a bunch of money into your account knowing you’ve earned it and it’s paying for your investment.
With my first rental property, collecting rent was pretty straight forward. My tenant lives in the flat above me so it’s just a matter of knocking on the door – there’s no hiding from me here. Now, my other two properties are a whole different story.
Read more…
Steve Rent Bounced Cheque, Mortgage Payment, Rent
