IN A RECENT SPEECH YOU TALKED ABOUT RENTVEST. RENT YOUR OWN LUXURY HOUSE, INVEST YOUR CASH IN CASHFLOW JURISDICTIONS LIKE EDMONTON, FLORIDA, OR?

It is not a new concept for luxury buyers. Example:

Last week I talked to a friend who lives in a 5 million luxury property. His taxes are $33,000 per year and common area costs are $3,500 a month (likely  going higher).
That’s 5 million invested in and $75,000 a year (rising) ever year.

If he rented the place at $9,000 a month or $108,000 a year and bought cash flow properties elsewhere, this is what it could possibly look like:

Buy 25 x 1-bedroom new condos in Edmonton at $200,000 each (or Florida/elsewhere). They rent at about $2,000 per month.

You buy 25 of them with cash – gross income $50,000 a month. Allow for 8% professional management and 7% extra costs (tax and strata). Net $42,500 times 12 = $510,000 

Work out the difference to now: You pay now $75,000 tax/fees, rent would be $108,000 — $33,000 more in rent payments.

$510,000 income minus $33000 – net income $477,000.

You live in a fine luxury home, no worries about tax and strata increases and pocket close to $40,000 a month. 

Ok, ok, use your pencil and make your own addition to prop taxes and strata fees. 

Or let’s say you had $2 million down payment and took out a $3 million mortgage – now add your monthly payments of $17,400 per month or $208,800 per year!

But I just wanted to demonstrate the point: Here is a fine story on the concept for younger people: howtomoney.com/rentvesting/ or watch my now dated but still valid video “Live your money” youtube.com/watch?v=VGsFRHfrues