I need more, but don't know how to start.

by Kevyn House

What the heck, it never hurts to ask.

I am the current owner of a single family investment property in Guelph Ontario.

This house is currently revenue neutral.

I do not make any money, nor does it cost me (except for the $7k renovation I just completed in April). I have a stable long term tenant who will very likely be in this house for the next 10 years.

My goal when renting this property was to find a stable long term tenent who would take care of the property, pay the rent, and not cost me any money - I achieved that goal.

I now have a new goal. I would like to retire. More specifically, I would like to quit my job. I do not care if that takes me another 5-10 years, I just want there to be an exit strategy.

My question.

I have about $60,000.00 in equity on my rental property.

How can I use this equity most effectively to buy one, two, three (start with one) more property? Can I use this equity?

I am sure I can - I just do not know the best way. I would prefer not to sell the property to access the equity.

The area is increasing in value at about 8-9% per year, and there are plans to build a GO train station within walking distance of the house - which will only increase the value.


Comments for I need more, but don't know how to start.

Click here to add your own comments

May 28, 2010
RE: I need more...
by: Tom Karadza

Hi Kevyn,

Congrats on hitting your first goal.

Many people never make it to that step.

So pause to congratulate yourself.

As for accessing the $60K in equity ... the easiest way is a "refinance" of the property but that can include paying mortgage penalty fees.

And depending on the mortgage products available to you and the value of the property you may not be able to access all of it.

I would speak to a good mortgage broker and ask them to map out the fees involved in refinancing the property and giving you a realistic amount of money that you could extract.

Remember, when you do this your carrying costs on the property will go up b/c the mortgage has increased which may make the property go into negative cash flow status on you.

Also, if the market changes and properties fall 10% if you're highly leveraged you may be "under water" ... make sure you're comfortable with that. As long as you continue to rent the property that shouldn't be an issue, but at least plan for the possibility.

So...there's no direct advice here but hopefully this helps a bit.


Click here to add your own comments

Join in and write your own page! It's easy to do. How? Simply click here to return to Submit A Question.


  Some Cool Free Stuff...

  Step 1:

Grab a free digital copy of our real estate investing book, Income  For Life For Canadians, right here. This book has been downloaded over 22,597 times and has helped hundreds of investors kick-start their investing with simple and straight forward strategies that you can implement right here in Canada.

You'll also receive our weekly [Your Life. Your Terms.] email newsletter with the latest investing updates and videos.

  Step 2:

Free Weekly Investing Videos & Articles: Get the latest updates and join the over 10,000 other Canadians enjoying the weekly [Your Life. Your Terms.] email newsletter. The email is sent out each Thursday. And as a little bonus we'll give a FREE digital copy of the book, Income For Life For Canadians, too!

Your Life. Your Terms.

  Step 3:

Free LIVE Investing Class: Do you live in the Greater Toronto or Golden Horseshoe Area? Come out to our next introductory "Investing in Nice Homes in Nice Areas" Real Estate Class.

Get all the details by clicking here.

It's 90-minutes and you'll learn a ton - promise!Thousands of investors have now joined us for this class and the feedback has always been amazing.

Click here to get book

This book has been downloaded over 22,597 times and has helped hundreds of investors kick-start their investing with simple and straight forward strategies that you can implement right here in Canada.

  Click here to subscribe