So you are locked into a variable or adjustable  rate mortgage , now what?

First of all, I am going to say that there is a lot of people hurting right now who are too embarrassed to talk about it. 

There isn’t anybody I know who thought we would see interest rates go from .25% to 4% in less than a year. Scotia bank was the only bank I know who predicted 8 rate increases which would have got us to 2.25% 

The bank of Canada governor, Tiff Macklem, telling people in October of 2020 not to worry, interest rates will stay low for a long time. 

I don’t know a single mortgage broker who was telling people, myself included, to take a fixed rate mortgage.

So please, don’t feel bad, or embarrassed for taking a variable or adjustable rate mortgage. 

So now what, what are your options besides cancelling your Disney plus memberships. 

Keep in mind I am not a mortgage broker and everybody situation will be different. From my prospective at this point, it does not make sense to switch to a 5 year fixed rate, but looking into locking into a 2 year or 3 year fixed might be a good option to help give you some stability. 

If you don’t lock in, you are essentially riding the variable wave. There are still talks of increased rate hikes coming but hoping we see the rates come back down sooner rather than later. 

Next would be to tighten up expenses, while Cynthia Freeland took a lot of heat for saying Canadians should cancel their Disney plus memberships to save expenses, her message isn’t wrong. Cancelling services that are luxurys can help you get back to a comfortable monthly carry. 

Selling liabilities is never a bad move, if you have toys like cars, motorcycles, boats especially if they have monthly payments… unfortunately, they may have to go. I don’t like selling assets like stocks or real estate but it may come to that point depending on your situation. 

Your last option if you do not want to lower or can’t lower expenses is to increase your income. 

Some tough choices are going to have to happen, I know nobody is talking about this because we are proud Canadians, but you are not alone, this will be a tough couple of years. Yes years. Please adjust and prepare accordingly. 

I am always a phone call, text, or email away if you want to confidentially strategize. I promise you I wont just ask for your listings. 

Why the Legal 3+2 Unit Property?

In my opinion the 3+2 bedroom legal two unit dwelling is the perfect combination between solid numbers, ease of entry, and ease of management 

The reason why condos and single family residential are such a popular investment are because of how easy they to get into and while that is true the major problem is the properties are not turning a profit, yes losing money each month. Investors are gambling that the market will go up and that’s how they will offset the negative cashflow. 

On the other end of the spectrum you have multi-family properties which are 3 or more units, which can generate great cashflow with a great return on investment. They have a higher barrier for entry though because they are typically more expensive and will likely need more money down if you need a commercial mortgage. Also with a multi-unit investment, the tenant profile can be lower as well, making it harder to manage  

The 1960’s brick bungalow is the perfect investment option because they are typically in quiet residential streets with large lots, separate entrances, and liveable basements that allow for a legal second suite.

The 60’s bungalow also has a low barrier for entry and a high quality tenant profile, but unlike a condo can give you high ROI. The reason you can get such a higher ROI is because you have the ability to add value quickly with the Buy Fix Refi Rent investment strategy.