'Homeowners have been reported to have as much as 41x the net worth of renters on average. Buying a home can be a great investment, but there are clear dangers too'.
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Can it Deliver?
Passing on the family home to the next generation can be a very valuable part of an inheritance. Yet, most drastically overestimate the role of their primary residence in their financial future. A home doesn’t last forever, especially in its current state of glamor.
- What if you lose it to environment causes?
- What if you need more income to keep it?
- Can your home provide for you in retirement?
- Will it provide for your long term care needs and costs?
A report by The Globe and Mail suggests that within the next 44 years there could be 20x the number of Canadians living to be over 100 years old. It also estimates long-term care costs for a private room can exceed $50,000 a year. That could be far higher later thanks to inflation.
Aside from income and alternative housing needs, will your home be up in equity when it comes time to pass it on to heirs or will it be a burden?
What’s a Better Investment than a Home?
A house can be a great investment, but there can be alternative options. Buying a home is an excellent move. Yet, adding income producing real estate can completely change the dynamics of future finances. Diversifying into different sectors like retail property and office buildings provides great protection from market changes.
The benefits of an income property include covering you now, in an emergency, in retirement and providing a managed portfolio as an inheritance that will deliver on your succession and philanthropic goals when needed.
Summary
Buy a home with a sustainable mortgage. A property that will last, and can be used as a financial tool. Yet, don’t neglect the power and necessity of spreading your eggs among more baskets, and ones which can actually produce income as well as wealth gains
Source: richardcrenian.ca/
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