Do these 5 things if you want to build capital faster and get your home working for you right away.
1. Always buy the outdated but well cared for home that you can strategically improve upon over time, building up your equity over time as it appreciates. When it’s your principle residence, in B.C, Canada, all of that gains is exempt from tax, allowing you to carry it forward to your next purchase.
2. Whenever you can, always try to find a way to make your property work for you. It can be simple extras like renting out a parking space, to having a rental suite or renting storage space. Can you run a business, get ALR status or even grow your own food?
3. Consider long term Development. Properties flourish close to things like transit and city centres. Have a look at your local zoning and municipal plans so you can see where a good up and coming location will be that will be desirable. Things like being close to schools, hospitals, shopping, recreation and transit are important. Strategize to buy homes these up and coming neighbourhoods to get in before they are in high demand and prices soar.
4. Highest and best use. There are homes I come across all the time with untapped potential to really maximize value. I’ve witnessed some amazing gains made by cleaning up poor landscaping, adding skylights and more natural light into a home. Do you have an awkward layout that you could open up? Can you add an ensuite where there is none? Can you build a shop? Can you add a coach home? Can you stratify or subdivide?
4. Repeat # 1 every time you sell and upgrade. By doing this over and over through the various stages of life as you need it, you will be able to grow your principle residence over time without the payment of capital gains tax. This compounding effect over time really makes a difference. Again this only applies to principle residences and according to tax law. We advise that you seek out professional advice from an accountant to get advise that’s right of you as I am not an accountant.
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