(1) Why should I invest in real estate?
Because in a politically and economically steady country, real estate is always the best investment in one’s life in a long run, on top of the comfort of living in your own house.
(2) Why should I buy properties as investments?
Again, it is like owning blue chips stocks, in a long run, investment and commercial properties give secure good return.
(3) Should I not use the money to buy stock rather than properties ? I get my money back much quicker ?
This is why real estate is usually a long-term investment. Quicker return also means higher risk.
(4) Do I pay capital gain tax on the house (property) I live in if I make a profit when selling ?
In the United States, you do.
In Canada, you do NOT.
(5) Does it mean that I am better off in Canada when it comes to selling my house ?
Not necessarily. The mortgage interest that you can deduct from your income tax in the United States CANNOT be deducted in Canada.
(6) I am a first time home buyer. Is there any program that might benefit me?
Yes. Depends on whether you live in the United States, or in Canada. And also it depends on which state or province you are in, there are government incentives to help first time home buyers. Check with the realtor that you are working with. Or look under Government Regulatory Agencies in this website.
(7) What is a good area (neighborhood) to move to?
A good area usually costs more. It certainly depends on what price range you can afford. However, understand from the realtor you work with, look for good value property (area). Future government zoning change nearby might give a neighborhood great appreciation in the near future, ie. Government newly-approved mall nearby, or new freeway (highway) planned.
(8) How do I know if a neighborhood is good or bad ?
Go to a local police station and find out. Ask them the crime rate statistics to compare with other neighborhood.
(9) Education is important to me as a parent. How do I know if the school in the area is good ?
Look under school boards and other similar organizations from the internet or library. See how that school and teachers were ranked. See if any awards were won in the past.
(10) Should I pay down my mortgage when I have extra money?
It depends on where you live.
(a) If you live in the United States, it might not be a good idea, because mortgage interest is deductible from annual income. That means you pay less income tax for the year.
(b) If you live in Canada, mortgage interest is NOT tax deductible. So, you should use the extra money to pay down your mortgage principle.
(11) Between stocks and properties, which one has higher risk?
The value of stock can go down to zero. For properties, especially houses, in a difficult situation, you can always rent it out to tenants, in order to have income.
By John Benson