The Role of Real Estate in Retirement Planning in Canada_edited.pptx

Real Estate is important for a diversified portfolio. Besides the great tax breaks, Canadian real estate helps diversify and protect your retirement portfolio.

1. Sharp Asset Management Inc. The Role of Real Estate in Retirement Planning in Canada 416-722-9009 [email protected]

2. Introduction: Planning for retirement is essential to ensure you have enough income to maintain your desired lifestyle after you stop working. A secure income stream is crucial for covering your expenses in your golden years. Real estate can be a valuable tool to consider when crafting your retirement plan in Canada.

3. How Can Real Estate Contribute to Your Retirement Plan? Benefit Description Steady Income Stream Rental properties provide a consistent income source, supplementing pensions and CPP to uphold your preferred lifestyle. Appreciation Potential Historical trends suggest Canadian property values may appreciate, offering a potential gain upon sale. Inflation Hedge Real estate in Canada tends to keep pace with or surpass inflation, safeguarding your purchasing power.

4. How Can Real Estate Contribute to Your Retirement Plan? Benefit Description Tangible Asset Owning and controlling real property fosters a sense of security and stability. Taxation Advantages Strategic tax strategies like Capital Cost Allowance (CCA) deductions and mortgage interest can offer benefits (consult a tax advisor). Portfolio Diversification Real estate diversifies your investment portfolio, mitigating overall risk as it often operates independently of the stock market.

5. Tax Advantages of Real Estate for Canadian Retirement Principal Residence Exemption (PRE) : Your principal residence enjoys a capital gains exemption (consult a tax advisor). This means profits from selling your primary home are generally not taxed. Reduce Taxable Income : For rental properties, claim Capital Cost Allowance (CCA). Deduct a portion of the building's cost from your rental income over time, lowering your taxable income. Downsize & Save : Selling your principal residence for a smaller home can generate tax-free capital, lower property taxes and maintenance costs, and potentially free up cash for retirement. 

6. Considerations for Canadian Retirement Real Estate Investment Financial Considerations Upfront Costs : Carefully factor in down payment, closing costs, potential renovations, and vacancy periods. Ongoing Costs : Property taxes, maintenance, repairs, and potential management fees can erode profits. Cash Flow Analysis : Ensure the property generates sufficient income to cover expenses and yield a profit.

7. Considerations for Canadian Retirement Real Estate Investment Time Commitment Management Responsibilities : Landlords dedicate time to tenant concerns, repairs, and property showings. Liquidity Considerations : Selling real estate takes time, limiting immediate access to cash.

8. Considerations for Canadian Retirement Real Estate Investment Market Risks Market Fluctuations : Be prepared for potential downturns that could impact property value. Interest Rate Sensitivity : Rising interest rates can affect mortgage payments and profit margins.

9. Contact us 21 Greenwin Village Rd. Toronto, Ontario M2R 2R9 416-722-9009 [email protected] P.O BOX 74539 Humbertown Centre, 270 The Kingsway Toronto, ON M9A 5E2 www.sharpasset.com

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