Advantages of Turn-Key Income Properties

Real estate investing has built-in defenses against fluctuating economic cycles that many other investment vehicles do not. Because of these unique advantages, real estate can generate multiple income streams making it an attractive investment.

Long-Term Appreciation

Turn-Key Income Properties are one of the few investments that keeps pace with-or even exceeds-inflation. Over the long term (and sometimes the short term) turn-key income properties will appreciate in value due to inflation and market demand. These gains form a solid basis for building on and preserving wealth by providing funds to reinvest in higher-value properties or by allowing you to establish a line of credit to use towards additional investments. What did you pay for your home 20 years ago and what is it worth today?

Tenant Pays for your Mortgage

For a small down payment, the bank effectively “purchases” your property for you by providing a mortgage that covers the majority of the purchase. Your tenant then “pays off” the mortgage for you via monthly rental payments. With the right property this relationship can extend over the term of the mortgage, eventually resulting in a mortgage-free asset that required minimal outlay on your part. Few investments can claim this unique structure. Equity Growth Projection Model

Cash Flow for a Lifetime

The difference between rental income and property expenses represents your cash flow. Over the life of your mortgage, as rental income is continually upwardly adjusted for inflation, the spread between the revenue and expenses widens, resulting in higher and higher cash flow over time. Once the mortgage is paid off, you are left with a clear title to a property that will continue to generate income until you sell it.

Increasing Profits through Leverage

 

Leverage greatly augments the income-earning potential of your available finances. For example, instead of buying one property for $100,000, you can leverage that same $100,000 by using it to finance down payments on three properties. Because appreciation is measured by the full value of the properties, and not by how much or little you’ve actually put down on them, leverage multiplies your returns substantially. Further, as the mortgage is amortized – paid down – your equity increases, creating more funds to invest in other properties, which in turn increases your leverage. The Power Of Leverage

Tax Advantages of Turn-Key Income Properties

Real estate offers exceptional tax breaks for investors. While many of the advantages cited below are common to a wide range of properties, each individual investor’s objectives and circumstances are unique. Prior to investing, we encourage you to meet with a Platinum Properties Group Investment Executive to explore the benefits and opportunities specific of your own individual situation.

Tax-sheltered Profits

With real estate, you can cash out a portion of your profits without incurring taxes if you refinance the property with a new mortgage and then reinvest the tax-free profits in the new mortgage. This way the profits are put to work for you.

Tax Deferral

Real estate profits are not taxed until you sell the property. For example, if you purchase a home for $100,000 and it appreciates to $150,000, the $50,000 gain is protected from taxes until you sell the property. This allows your investment to grow tax-free year over year, further compounding its worth.

Capital Gains Tax Treatment

Because real estate appreciation profits are treated as capital gains, only 50% of your gains are taxed. In contrast, interest earnings from bonds and GICs are taxed on the full amount of the gain.

Tax-free Cash Flow

For tax purposes, positive cash flow generated in excess of your expenses can be offset by capital cost allowance (CCA). CCA is an accounting term for depreciation due to the building’s physical wear and tear. By employing CCA write offs, your positive cash flow remains tax free until you sell your property. The ability to defer taxes on this profit center is a significant advantage for real estate investors.

Tax Deductions

Financing and operating costs such as mortgage interest, property management fees, property taxes and repair & maintenance can all be claimed as deductions against rental income, further reducing the tax burden. Real estate offers exceptional tax breaks for investors. While many of the advantages cited below are common to a wide range of properties, each individual investor’s objectives and circumstances are unique. Prior to investing, we encourage you to meet with a Platinum Properties Group Investment Executive to explore the benefits and opportunities specific of your own individual situation.

Tax-sheltered Profits

With real estate, you can cash out a portion of your profits without incurring taxes if you refinance the property with a new mortgage and then reinvest the tax-free profits in the new mortgage. This way the profits are put to work for you.

Tax deferral

Real estate profits are not taxed until you sell the property. For example, if you purchase a home for $100,000 and it appreciates to $150,000, the $50,000 gain is protected from taxes until you sell the property. This allows your investment to grow tax-free year over year, further compounding its worth.

Request a Free Guide!

Contact Us

Platinum Properties Group Corp.
707 – 777 West Broadway
Vancouver, BC
Canada V5Z 4J7
Phone: (604) 638-3300
1-866-307-8888
Fax: (604) 713-1678
1-888-778-8815