Investment Avenues > 5%
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Posted on: 10-06-09 06:35:33
Hi ,
I was wondering what secure investment avenues I have which can yield a good rate of return ... Amount is upwards of 60K .
1. NSC in India @ 8% but not sure if the proceeds can be repatriated back . Plus money blocked for 6 years although 8% is compounded half yearly .
2. Buying a house in Brampton for 250K and renting it for approx net 1500 pm ....... return close to 5% ....... Cons .. would lose 10 - 20 K upon re selling .... current mortgage rate is low .
3. FCNRs offer 3% return ....... liquid and repartriable . ... but below 5% .
4. Any other that CDs can suggest ..... might need to dis invest in 3 years time .
Not sure if we would stay in the GTA 2 years hence .
Thanks for reading . Would appreciate advice and suggestions as always .
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Fido.
Quote:
Originally posted by Fido
Not sure if we would stay in the GTA 2 years hence .
Now, this "not sure" can change things a lot. Besides this, what portion you are willing to invest and for how long can also matter. Obviously, your risk tolerance as well. And, in any country, playing around with local currency is always ultra easy.
I would recommend in this order: (2), (1), (4), (3) with following thoughts.
(2): RE is never going to die. Up and down is for sure. But it's never going "out". Simple reason being over 100K immigrants landing each year and increasing population.
(1): 8% is attractive. But what else should be considered is the conversion rate (From Rs30 to Rs42 in 3-4 yrs) and money crossing borders (CRA and taxes).
I don't see how a leveraged RE investment can be profitable in this case, unless RE prices really shoot thru the roof in 3 years time.
Fido has $60K to invest in the $250K house, which means the mortgage principal will be $190K.
He needs to get rid of the investment in about 3 years time, which means he's looking at a mortgage term of 3 years.
Those rates are running about 3.15% these days.
A 3 year GIC on the other hand, is running at about 3% these days.
So compare a no-risk, guaranteed investment at 3% vs a leveraged, highly volatile and maintenance-prone investment.
I see no reason to buy....
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"Mah deah, there is much more money to be made in the destruction of civilization than in building it up."
-- Rhett Butler in "Gone with the Wind"
Thanks Sville and Pratickm ,
Valuable suggestions in deed . The way I see it is that the return is either 3% in GIC for 60K or 5% net on 250K even after interest costs .... Its either 2K or 12.5K per anum ............ simple leverage .
Plus there s a possibility of appreciation over 3 years .......
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Fido.
Quote:
Originally posted by pratickm
I don't see how a leveraged RE investment can be profitable in this case, unless RE prices really shoot thru the roof in 3 years time.
Fido has $60K to invest in the $250K house, which means the mortgage principal will be $190K.
He needs to get rid of the investment in about 3 years time, which means he's looking at a mortgage term of 3 years.
Those rates are running about 3.15% these days.
A 3 year GIC on the other hand, is running at about 3% these days.
So compare a no-risk, guaranteed investment at 3% vs a leveraged, highly volatile and maintenance-prone investment.
I see no reason to buy....
Just a quick question, which bank is offering 3% GIC for 3 years? This seems good interest rate.
Thanks
Quote:You'll have to go thru a GIC broker for this - none of the major banks are posting this rate officially.
Originally posted by web2000
Just a quick question, which bank is offering 3% GIC for 3 years? This seems good interest rate.
However, GIC Direct's rate was very close (2.95%) when I checked last, so you can easily go thru them.
Some folks on redflagdeals have said they got 3% for 3 years for large amounts like one guy got it for investing 90K.
I assume the OP with 60K might also be able to get that.
-----------------------------------------------------------------
"Mah deah, there is much more money to be made in the destruction of civilization than in building it up."
-- Rhett Butler in "Gone with the Wind"
Quote:
Originally posted by pratickm
Quote:You'll have to go thru a GIC broker for this - none of the major banks are posting this rate officially.
Originally posted by web2000
Just a quick question, which bank is offering 3% GIC for 3 years? This seems good interest rate.
However, GIC Direct's rate was very close (2.95%) when I checked last, so you can easily go thru them.
Some folks on redflagdeals have said they got 3% for 3 years for large amounts like one guy got it for investing 90K.
I assume the OP with 60K might also be able to get that.
Thanks
