Personal Finance

Don’t sell your house – Ever!

Keeping your existing house when you buy a new one could be THE most profitable financial decision you could make. Consider the following:

  1. Second stream of income: When you move to another place and keep your current house as a rental, this gives you an extra stream of income.
  2. Pay less tax: Your rental property produces business income. When you have a business, you are entitled to tax write-offs. This could save you a lot of money that you would normally pay to CCRA (Revenue Canada).
  3. Fast wealth: Tenants will pay off your mortgage in a rental property. Your net-worth will grow without you having to save out of your own income. When you have one or more tenants there is a team effort in building your wealth, fast!
  4. Bargain priced: You will never again be able to buy the same type of property for the amount you paid for it originally. The value of all the other houses have gone up along with yours. You already own what an investor would consider a bargain in the current market.
  5. High rate of return: The rent you can charge for your house is based on the current market. Rents have gone up but the cost of your house is still what you originally paid for it. You are getting a higher return on investment. In the current market you would have to spend a lot more to get the same rental income.
  6. Guaranteed income: If you are willing to make some small changes to your house so it meets the standards required for disabled people, you will have a long list of potential tenants waiting for you. In many cases, some government agency will be paying their rent. You will get a good, stable, low-maintenance tenant. You will also be helping someone in need. If you need money for the renovations, you can re-finance as much as 90% to 100% of the market value of your house. Government grants may also be available.
  7. Increased tax write-offs: In most cases, you can write off the interest paid on the mortgage of a rental property. If you keep the mortgage as high as possible, you maximize the tax write-offs.
  8. Pay off your own home faster: Keep the mortgage on the rental property as high as possible by re-financing to the max as the value goes up. Use that equity to pay off the home you live in, faster.
  9. Tax-free retirement income: After your house is paid off quickly by using the equity in the rental property, you may be able to use the refinanced cash as a tax-free retirement income. Borrowed money may or may not be taxable. Check with your accountant.
  10. Gain freedom from the slavery of a J.O.B.: It takes far less time to maintain rental properties than the amount of time you would spend in a job. If you build up your portfolio of rental properties to 5 or 10 and pay them off (or keep refinancing), you will have as much or more income than your present job. You can be your own boss, work only a few hours, spend time with your family, and really enjoy your life.

These strategies will not work for everyone. Before you implement your plans, check with an accountant, lawyer, mortgage broker or other professional. You may need to work with someone. Use your children, parents, brothers, sisters, good friends as a co-signer or co-investor. Grow wealthy together, with the people you love.

To qualify for the lowest mortgage rate in Canada, go to and click on Canadian “Mortgage Calculators”. Check out the “Pre-Approvals” and “Credit Problems” pages to get the banker’s perspective on your credit profile.

For ideas on how to set up a reliable monthly income from rental properties when you have very little time or money go to:

Warm Regards,

Neeraj Varma

About the author
Get the inside scoop on what it takes to qualify for the lowest mortgage rates in Canada – ( For personal service apply online.