Turn your primary residence equity into rental income. How Canadian homeowners are building real estate portfolios using their home equity.
Canadian real estate has historically doubled every 7-10 years. Using your home equity to invest in additional properties can accelerate wealth building significantly.
Open a HELOC on your primary residence. Draw the down payment when you find an investment property. Only pay interest on what's used.
Best for: Multiple properties over time, flexible timing
Refinance your existing mortgage and pull out equity in one transaction. Get a new mortgage at current (potentially lower) rates.
Best for: Single large withdrawal, rate optimization
Take out a lump-sum second mortgage on your primary residence. Fixed payments and rate. Use funds for investment down payment.
Best for: Predictable payments, one-time purchase
Buy, Rehab, Rent, Refinance, Repeat. Use home equity for initial purchase, refinance after renovations to pull out more equity.
Best for: Renovation enthusiasts, maximizing leverage
| Metric | Amount |
|---|---|
| Investment Property Down Payment (Non-Primary) | 20% minimum |
| Average Canadian Rental Yield | 4-6% annually |
| Typical Investment Property Mortgage Rate | 6.5-8.5% (higher than primary) |
| Minimum Credit Score (Investment) | 650-680 typically |
| Capital Gains Tax on Sale | 50% of gains taxed as income |
Investment properties typically have rates 0.5-1% higher than primary residences. Factor this into your calculations.
Budget for months without tenants. Have 6+ months of reserves for mortgage payments during vacancies.
Factor in property management (8-10% of rent) or your time if self-managing. Repairs and maintenance add costs.
When you sell, 50% of appreciation is taxable. Plan for this tax liability or consider a 1031-equivalent strategy with your accountant.
Use your home equity to start building real estate wealth today.
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