Win Three Times
Tenant pays off your mortgage (debt reduction)
When the right factors are present (numbers, location plus good bones) the mortgage is being paid by someone else, not you. This may mean you aren’t paying the mortgage on your principal residence, or investing your money in something long-term. Someone else is paying this for you! It’s like going to the bank, getting a loan to make a sound investment, and having someone else pay it off. In many situations the rental income goes beyond paying the bills and actually generates positive cash flow as well as providing you with a home to live in.
See some examples here.
Your property increases in value (wealth accumulation)
Just as with a single family home, your income property increases in value over time. However, with an income property you have the added bonus of the appreciation being gravy since you are not paying for most or all of the mortgage out of your own pocket. This makes that return on investment (ROI) that much more significant. Plus, if the property is in a key, central location, even greater appreciation is gained. Location is one of the key factors in achieving the best ROI. Learn more about choosing the right location.
You own land (wealth accumulation)
Unlike condominiums where you do not own land, when you buy a property that includes land, you are in a much better position for greater wealth accumulation. Especially in a city like Toronto, the land in the core becomes increasingly in shorter and shorter supply, making it also become more and more in demand. Simply put, the population continues to grow while available land becomes more limited. So, as demand for land increases in areas where there is a great density of people, the price for land goes up and so does the value of the land that you own with your income property.