Buying a Second Home as a Retirement Nest Egg
Retirement is something that’s on everyone’s mind. No matter what you’re doing now and how much income you are making there is always that nagging feeling at the back of your mind concerning your retirement plans. With the current market trends signaling that we are in a Buyer’s Market – you have plenty to choose from. This is why it is so important to look at all of your options when considering your golden years.
It used to be that you could invest your money in GICs and see quite a healthy rise in your investment over the years. Now, with the interest rates being what they are, GICs just aren’t paying back what they used to. On the other hand, now is the perfect time to invest in real estate with the low rates dangling right in front of you.
Income property
While it’s not for everyone, buying a second home in Calgary could become the retirement nest egg that you’re looking for. When you purchase a second property and rent it out, your mortgage payments and usually other expenses like land taxes will be covered by the rental costs. This means that you will be building up equity in the home without having to make any payments on your own.
One of the reasons why a lot of people hesitate to buy a second property is the work involved with renting it out. There are property managers that you can use to do this work for you but you’ll have to talk to your accountant to see if hiring a management company will eat up too much of your profits.
Some people get lucky and find a reliable and trustworthy renter for the property that stays there year after year. This is the best case scenario and as long as you or your property management company do a home inspection on a regular basis then everything will be fine. It’s just a matter of finding the right renter so that you don’t have any additional problems like late rental payments or house damage to worry about.
If you’ve been talking to an investment counselor for your retirement plans the thought of purchasing a second home here in Calgary may have never come up. These types of consultants get paid a commission on the programs they are offering and won’t make a penny if you decide to turn your money into a real estate investment.
It’s a good idea to sit down and crunch some numbers with your accountant to find out if you’d be better off putting your money into another home as a retirement investment. The time is now to purchase while we are in a Buyer’s Market.
