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Old 04-07-2016, 07:46 AM   #21
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I agree. These are the best ones I have as for the yields myself (TO for Toronto Exchange)...

BCE.TO BCE Inc. 4.56%
TRP.TO TransCanada Corporation 4.56%
RY Royal Bank of Canada 4.12%


I moved to Canada last year, and I am finding that some of Canadian stocks have relatively high yields compared to the US counterparts IMO...
What percentage do you pay as income tax (rentals are 100% of tax bracket)

If a bond yields 4% (for example) and inflation is 2%, can I assume that real yield is only 2%?

My question is related to that rentals value might increase over time
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Old 04-07-2016, 07:47 AM   #22
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Originally Posted by VFK57 View Post
A lot depend on rental market in area you have your rentals. If you have 6% return after all your expenses (including future repairs and periods of not occupied time), it is a good return (in my opinion).
Yes and I am willing to bet that the 6% has no provision for future repairs and vacancy. Nor is there any allocation for the personal time (at market) factored in. This is a common fallacy for property owners.
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Old 04-07-2016, 07:56 AM   #23
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A lot depend on rental market in area you have your rentals. If you have 6% return after all your expenses (including future repairs and periods of not occupied time), it is a good return (in my opinion).
Definitely not good enough for a property investor. It may be OK for an accidental landlord. The risk premium is not accounted for. Most investors require 12%+ returns for a rental, even then it's difficult. A flipper needs even higher.

But if it works for the OP, that's OK.
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Old 04-07-2016, 10:15 AM   #24
Confused about dryer sheets
 
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Definitely not good enough for a property investor. It may be OK for an accidental landlord. The risk premium is not accounted for. Most investors require 12%+ returns for a rental, even then it's difficult. A flipper needs even higher.

But if it works for the OP, that's OK.
I got those returns five years ago (accounting principal paid and money in my pocket after tax), and i can still get those returns buying new properties with 20% down payment ( my math is around 12%)

House price= $200K

Down payment =$40K

Mortgage rate= 3%

Monthly Mortgage payments=757

Prop tax $1500 (year)

Insurance $1000 (year)



Monthly rent $1350



Money in the pocket before canadian tax $4613



Money in the pocket after canadian tax $1000 (tax is calculated over interest paid)

Equity=$4500 ($160k original minus balance after a year ($155.5K))



Total gain=$5.5K



Invested $40 as downpayment (plus lawyer/transfer fees), with a5.5K return that translates in a 14% ROI after paying all taxes.





My problem is that almost all of that gain comes from capitalization of the house with no much liquid money.

The only way to have liquid money is not owing to the bank, or with a line of credit and paying interest (that translates in smaller return)



That plan worked for me to increase my capital, but now that i am thinking in retire i am looking for other options
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Old 04-08-2016, 05:23 AM   #25
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Your leverage approach works as long as you have income to support it. Upon retirement, you need to achieve a balance with sufficient cash flow as the primary goal. Becoming rich on paper is only adequate if you can afford it!
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