Bruce M Firestone, B Eng (civil), M Eng-Sci, PhD
Real Estate Investment and Business coach
Century 21 Explorer Realty Inc broker
Ottawa Senators founder
-MAKING IMPOSSIBLE POSSIBLE
-FREEDOM VIA REAL ESTATE INVESTMENT AND PB4L, PERSONAL BUSINESS FOR LIFE
-FEHAJ, FOR EVERY HOME A JOB
-MAKE YOUR HOME WORK FOR YOU, INSTEAD OF YOU WORKING FOR IT
-HIGHER ROI NOT JUST FOR OWNERS AND INVESTORS, BUT FOR TENANTS, GUESTS, VISITORS, NEIGHBORHOODS, COMMUNITIES, TOWNS, VILLAGES, AND CITIES TOO
postscript 1: I even have clients who’ve moved to their basement apartment and rented out the main part of their home so that they can pay off their mortgages faster…
postscript 2: once you have paid off your mortgage, you will benefit from a little understood principle–called “unearned rent.” It’s real but not easy to comprehend. Once you’ve paid off the mortgage on your principal residence, you will feel like you have more cash available and, it’s true, you will.
Here’s how: Say, you move out of your house and rent it for $2,000 per month. Cool. You have an extra $24,000 a year in income (ignoring for now any expenses against this new income stream of yours). But you have to pay taxes on this; let’s assume 1/3, so you are left with $16,000 in after tax income.
Still, you have to live somewhere, so you rent a nice place (equivalent to the home you just vacated) for $2,000 a month or $24,000 per annum. This rent is paid with after tax dollars.
Bottom line: By not renting out your home and moving into a rental, you are better off by $8,000 per year. This is a real, if suspiciously hard to grasp, bonanza that comes from home ownership and mortgage paid off!
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