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.

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Originally posted by Fido
Not sure if we would stay in the GTA 2 years hence .

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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.

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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....

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Originally posted by web2000
Just a quick question, which bank is offering 3% GIC for 3 years? This seems good interest rate.

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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"

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Originally posted by pratickm

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Originally posted by web2000
Just a quick question, which bank is offering 3% GIC for 3 years? This seems good interest rate.

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You'll have to go thru a GIC broker for this - none of the major banks are posting this rate officially.
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.

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