Why Invest in Real Estate?

1. Income: Income means positive current cash flow. Positive income returns occur when your investment income is higher than your investment expenses. Investment real property is analyzed based upon its ability to generate income. A fundamental benefit of RECCMOX real estate investing is an investment based on its potential to generate income, especially over the long-term as the mortgage is paid down. The income generated from your investment property will often be sufficient to offset the mortgage payment, taxes, condominium fees and other expenses, while still providing you with positive cash flow.

Your cash flow will be strengthened over time as you pay down your mortgage.

2. Leverage: Leverage is the use of borrowed money to increase your profits in an investment. Building wealth via real estate requires the use of leverage.

Leveraging Your Investment Capital: When borrowed capital is used to enhance the earning potential of an investment you are using the full benefit of leverage. When you invest in real estate you are choosing a tangible or hard asset, which makes financing more readily available to you. You are then substantially increasing the potential return on your leveraged real estate investment compared to a non-leveraged investment.

Leveraging Your Mortgage Financing: Further benefit is derived from leverage when the rental income generated from your investment property is used to pay down your mortgage financing. The rental income earned by your property will typically be sufficient to offset your mortgage payments and all associated expenses for your unit.

Leveraging Your Time: When you invest with RECCMOX you are choosing to leverage your time to your best advantage. You simply make the decision to purchase an investment property and allow Reccmox to do what it does best. You benefit from owing a high quality investment, while not having to deal with the day-to-day tasks associated with managing the property.

3. Depreciation: Depreciation is a convention of accounting and tax laws. It is the gradual, mandatory expensing of improvements to real estate over the life of those improvements. The rules for depreciation usually bear no relationship to the market value of the same real estate. The property can actually be appreciating in value while you are depreciating the asset on your tax return. Depreciation can be thought of as non cash expense of real property. This non-cash expense can reduce current taxable income while not reducing actual income. Depreciation is allowed in real estate investing.

4. Property Appreciation: Real estate appreciation refers to an increase in value of your home and the property. When your property appreciates, you have greater equity. Equities have historically proved to be both an excellent vehicle for long-term growth of money and a hedge against inflation, delivering a compound annual growth rate of 10.4% from 1926 to 2003. Although past performance is no guarantee of future results, this record of achievement demonstrates that common stocks offer the potential for capital appreciation that investors need in order to reach future goals.

5. Equity Growth: Investing in real estate allows you to build equity with each mortgage payment. In fact, the equity that you build by paying down your mortgage loan can be viewed as a kind of savings program. Principal is the amount of money you actually borrow from a financial institution to bridge the gap between your purchase price and your down payment. Your principal borrowed is then paid off over a number of years.

6. Diversification:
Asset Class Diversification Reducing the overall risk level of your investment portfolio is something you strive for and having real estate investments form a part of the solution is a decision with far-reaching benefits.

Asset class diversification is a key component of risk reduction because it ensures that at least a portion of your investment portfolio is performing well. Adding investment real estate to the range of asset classes you invest in will help offset the volatility of other assets, such as stocks. This reduces the overall risk level of your portfolio, providing steadier returns with reduced volatility.

7. Wealth Creation: The equation is quite simple:
Mortgage Financing Reduction + Property Value Appreciation = Long Term Wealth Creation Over time, strategically selected real estate investments can be powerful vehicles for wealth creation. It is that simple. The value of your investment property increases, while the corresponding mortgage financing is reduced nominally through regular mortgage payments. The result is increased equity and increased wealth.

8. Renewable Source of Capital Investment real estate is a renewable source of capital, through re-financing options as property values increase and mortgage financing decreases over time, and can effectively offset the potential diminishing capabilities of your RRSP.