How Leveraging a Financial Investment Property Works

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HOW LEVERAGING A FINANCIAL INVESTMENT PROPERTY
WORKS
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Why everyone should have at least ONE financial
investment residential or commercial property.
Let's break down the numbers. A financial
investment residential or commercial property
needs 20 down payment to finance, and closing
expenses are around 3 of the purchase rate which
totals to 23 for in our analysis purposes.
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Let's utilize an example of acquiring a 500,000
resale investment domestic or a commercial condo,
most likely a financial investment condominium in
Singapore. Check out competitive prices for
Housing and Development Board flats now! Visit
hdb direct. The needed capital is 115,000 (23
of 500,000). For now, we'll presume the 115,000
is not from a credit line it is from private
expense savings or financial investments.
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In 5 years at 2 yearly gratitude, the financial
investment property would be valued at 552,040.
The mortgage principal at renewal in 5 years
would be 341,898 (borrowing at 3 amortized over
25 years). The distinction ( 210,142) is the
equity developed. Looking for Singaporean landed
houses? You may check direct home.
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The preliminary capital expense 115,000 would be
210,142 after 5 years which is 95,142 in
pre-tax revenue ( 19,028 each year or 16.5
return on investment).
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Pre-Construction Condos Leveraging Let's look at
an example of purchasing a pre-construction
investment condo for 500,000. Let's presume in
this case the real estate investor has access to
a secured line of credit HELOC on their house at
prime 0.45 which is 3.45 based upon today's
rate of interest. The cost to bring 20 deposit
( 100,000) over four years which is a standard
period to construct a condo is 287.50 (interest
just) per month, which can be viewed as a
"financial investment contribution" just like
regular monthly RRSP contribution.
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If the investment condo values at 2 each year in
the four years which traditionally has stronger
gratitude, the value of the financial investment
for a condo at the time of purchase would be
541,216. 41,216 in 4 years is 10.3 yearly
return on investment without needing to preserve
a condo, deal with tenants or pay a condominium
loan. Remember the interest on the borrowed
100,000 is a tax cross out given that it is used
for financial investment purposes (Please seek
advice from a professional accountant as this is
not planned to be tax recommendations).
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Five years after the financial investment the
condominium registers, the apartment would
deserve 597,546 (at 2 appreciation) with a
condo mortgage balance of 341,898, that's
255,648 in equity over nine years or 13.5
yearly return on financial investment. Looking
to resell a Housing and Development Board flats
or condos? Visit this link hdb resale.
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4 Takeaways from leveraging a financial
investment property 1. With 20 equity in an
investment condominium, the investor's equity
position is at roughly 50 with the mortgage
paydown and 2 appreciation at the time of condo
mortgage renewal in 5 years
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2. Rinse and recycle in 5 years with mortgage
renewal the real estate investor can pull the
built equity to get another financial investment
property 3. Utilizing obtained funds is an
advanced tax strategy (consult accounting
expert). 4. 2 gratitude is comparable to 15
ROI. 2 might seem like a low number, but it
leads to double-digit ROI! Are the above numbers
overwhelming and you want to invest in real
estate? Contact us visit Singaporean property
deals. We can help!
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