Paradise Property Market

LOCKED IN THAT LOW RATE REFINANCE?

Now, what are you going to do with all that equity you just took out? Fancy new pair of shoes? Shiny new set of wheels? While those “things” all theoretically sound nice and would be a privilege to own, do they help you financially? Instead, what about reinvesting that equity into another real estate asset?

If you follow along with any news outlet on social media or mainstream media, it is impossible not to hear about the rising prices of detached homes in Guelph, Kitchener-Waterloo, and Cambridge. Since the beginning of the pandemic, a mass-influx of GTA-based buyers has sent Regional home prices soaring through their collective roofs.

These rising values have left fortunate property owners experiencing incredible amounts of appreciation. Look at a few examples from these cities; the average detached home in Guelph has seen a $132,000 (22.7%) increase in median sale price from the end of 2019 to the end of 2020. To put this into perspective, if you owned a detached home in Guelph for the past year, you made approximately $2,548 per week just from owning it. Looking at the same time period and median detached home sale prices in Kitchener-Waterloo and Cambridge, homeowners in Cambridge made just over $1,700 per week and those in Kitchener-Waterloo made just under $2,000 per week.

Now that I have your attention, let’s talk about action. If you’re an investor or own multiple properties, you’ve just seen a sizable increase in equity available to you on the properties in your portfolio. You might not want to reinvest all this capital in the current market boom to prevent potential risk of having all your eggs in one basket. Yet, at the same time, you don’t just want to sit on all this capital because you know you’re missing out on putting it to good use.

A potential answer? Treating yourself to a permanent vacation home, pulling out equity on your properties and using that to purchase your own paradise in cottage country. That sounds much better than letting it stay dormant within your portfolio. If you’re going to sit on your money, you might as well sit on it from the comfort of your dock on the Muskoka lakes, it’s having your cake and eating it too! When you’re not there, rent it out and let that baby cash flow! The overall vacation property rental market in Ontario continues to exceed expectations and we don’t see that trend slowing down anytime soon.

Want to keep chatting about what to do with your real estate equity? Email us at homesplus@westsidepartners.ca