There’s more than one place to reinvest the profits from the sale of your Montreal home. In this article, we explore some investment possibilities to make your money work for you!
People sell their homes for all sorts of reasons. Sometimes you need the money to pay off a debt. This often results in an unexpected surplus that can be deposited elsewhere. Instead of spending that money on material goods and other temporary things, you could reinvest those surpluses in a place that will make you even more money in the end! Here are our favorite places to reinvest the profits from the sale of a Montreal home!
Participatory real estate financing
A great way to profit from the sale of your Montreal-area home is to finance a property through participatory financing (also known as crowdfunding). If you take the time to find out about the various investment possibilities before you put your money in, taking part in crowdfunding could be a way of making money without having to worry about it.
RRSP
There’s no better way to invest in your own future. Money invested in an RRSP is not taxable. Investing in it will save you money. Many people open RRSP accounts and deposit money into them regularly to prepare for a comfortable retirement.
Rental property
When selling a home, it can be advantageous to buy another. That way, you avoid mortgage penalties. What’s more, if you manage to find a rental property that performs well on the market, it could generate substantial profits for you. If a house or rental property isn’t working out, maybe it’s time to try something new! If you buy a good rental property in Montreal, you’ll earn a steady income without too much effort, and profit from the money you receive when you sell.
Investment in property
If you sell a rental property that’s performing poorly, you can use the proceeds to improve your principal residence. Adding value to your home while incorporating a few features that make you happy can only be a good idea. Whether you’re renovating a badly aged kitchen or repairing your roof, now’s the time to do it. These improvements may result in higher capital gains taxes, but you’ll be able to claim a deduction for your renovation costs. However, for a tax increase to take effect, you’d need to generate a few hundred thousand dollars in profits! So you’re unlikely to face this situation.
Repayment of other debts
Do you have high-interest debt weighing heavily on your shoulders? Now it’s time to erase it. In most cases, paying money to borrow money doesn’t make much sense. While taking out a mortgage can be financially advantageous for some homeowners, the same cannot be said for high-interest loans and credit cards.
Before you spend all the money you’ve earned from the sale of your home, find out about every tax that could apply to each of your options. If you reinvest in a property of the same type, you may be able to save yourself from capital gains taxes and mortgage penalties. Check the tax laws before deciding where to reinvest the profits from the sale of your home. We always recommend consulting your financial advisor or accountant before starting any process.
