June 1, 2007, 2:30 am

Maybe Your Mortgage is a Good Debt

by: The Financial Blogger    Category: Assets and Net Worth
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I recently explained why your mortgage should be considered as a bad debt. However, as a coin as two sides, your mortgage can also turn into a good debt. Some modification has to be done so your property produces income, creates value and finally that your mortgage become tax deductible.

 

In order to produce income, small modification can be made to your property. With a few thousand dollars, you can turn your basement into a 4 or 5 ½ and rent it. You can also rent only a room to foreign students if you are living near by a college or a university. If you are self employed, you can open an office or even a daycare.

 

When you are renovating your property, always think about resale value. Some details might seem very appealing at the time of selling such as a new kitchen or a brand new Jacuzzi. It will add-up to your comfort and to the value of your property. In the end, your property will always gain in value overtime and it is still better than renting a creepy 3 ½.

 

Make your mortgage tax deductible. Then again, I come around with the Smith Manoeuvre strategy. This is just an awesome tool to make your whole mortgage tax deductible while turning the equity left in your property to profit.

 

With small modifications you can make money out of your property and turn it into an asset. Properties represent goldmines for several individuals. It might be the case for you.

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