RRSP/RESP/Mutual Funds vs. Real Estate
August 20, 2019 | Posted by: Sherry Corbitt
I understand that investing in RRSP/Mutual Funds, TFSA, etc., makes sense for some people. However, you are missing out on a massive opportunity since you aren’t leveraging someone else’s money and only earning interest on your hard-earned cash. Real estate allows you to put only 20% of the total property value and let someone else pay off the mortgage for you. Here is a breakdown - the numbers don’t lie. To show the difference, we need to compare apples to apples. In this example, we will assume you are putting $400/mth away into an RESP, RRSP, TFSA, Mutual Funds, or Savings Account.
RRSP/RESP/Mutual Funds
-$400 investment each month
-12 months/year
-15 years
-4% Annual return on investment
$98,436 = Total Savings After 15 years
Real Estate Investment
-$400/mth would be the approx. cost to borrow a
-$100,000 Down Payment
-$400,000 Mortgage
= $500,000 Investment Property
15 Years Of Ownership
4% Annual Appreciation
= $900,471 after 15 years
Mortgage remaining after 15 years = $246,189
Equity created in property $654,282 - $100,000 Initial down payment
$554,282 = Total Equity After 15 years
