Condo-Millionaire-Toronto-MM040414

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Condo-Millionaire-Toronto-MM040414

Rule # 2:GETWEALTHYTHROUGHLEVERAGEa.k.aOTHERPEOPLE’SMONEY.In short order, our Federal Government will be back earning largesurpluses, businesses will be hiring and spending and economic growthwill expand. Real estate prices will follow suit as they have for the last 34years. Real estate prices do not fall in expanding economies.Toronto has seen +5.6% compounded annual average price increasesover the last 34 years since 1980. This is despite 3 recessions andone high-tech meltdown. Over 34 years, homes have appreciated anaverage of 500%. If an investor had bought a property for $100,000 in1980 and put $20,000 down (20%), today that investor would have aproperty worth $500,000, a 2500% return on down payment, excludingrental profits. This is a real life scenario. It follows then if in 1980,an investor bought 6 properties and invested $120,000 and retainedthese properties until 2014, they would have a nest egg of $3,000,000.Consider this for a moment. What if this investor continued buyingproperty beyond these 6 initial homes? For instance, what if they bought1 additional home every 2 years for the 34 years (an additional 17homes)? THEIR WEALTH WOULD BE STAGGERING.“IF AN INVESTOR BOUGHT A HOUSEIN 1980 FOR $100,000 WITH JUST20%, BY 2014 THEIR RATE OF RETURNWOULD HAVE BEEN 2500%. THISREPRESENTS AN ANNUAL RATE OFRETURN OF 11.4% EVERY YEAR FOR34 YEARS. THESE ARE INVESTMENTRETURNS THAT WOULD PUT A SMILE ONWARREN BUFFETT’S FACE.”

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