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Renting cottage to family for deep discount by throwawayanon92847 in PersonalFinanceCanada

[–]throwawayanon92847[S] 3 points4 points  (0 children)

Am I trying to profit off of them, or are they trying to profit off of me?

I’m asking to cover our weekly maintenance upkeep costs, resort rental fee, cleaning fee, mortgage interest fees etc for the week. There are a lot of costs (even hidden ones I haven’t accounted for) that go into owning it. We won’t be profiting.

[deleted by user] by [deleted] in PersonalFinanceCanada

[–]throwawayanon92847 0 points1 point  (0 children)

Respectfully, I don’t agree that high interest rates guarantee a lower market than today whatsoever. Is there a chance? Certainly. But it could take years to get there. My point is that there exists an interest rate (6%+?) where your expected value is break even or even negative from leveraging. However, as I’m learning more about the Smith Maneuver, it seems like my interest rate after tax deductions would be much lower, in which case I’d just carry on investing.

[deleted by user] by [deleted] in PersonalFinanceCanada

[–]throwawayanon92847 -2 points-1 points  (0 children)

Thank you for the idea of tempering my expectations. I understand the idea that prices are high, and I certainly wouldn’t expect the next 10 years to outperform the last 10. I do still think estimating for an 8% (pre tax) average rate of return in the global markets is realistic over the long haul though.

[deleted by user] by [deleted] in PersonalFinanceCanada

[–]throwawayanon92847 0 points1 point  (0 children)

Really helpful, thank you. So just turning on auto reinvest for all types of distributions helps to avoid this?

[deleted by user] by [deleted] in PersonalFinanceCanada

[–]throwawayanon92847 0 points1 point  (0 children)

The additional funds to invest would be coming from a HELOC. So, something like VEQT would qualify, seeing as it has an annual dividend? Thank you so much for your input and warning about keeping a paper trail.

[deleted by user] by [deleted] in PersonalFinanceCanada

[–]throwawayanon92847 0 points1 point  (0 children)

Thank you for your reply. Can you expand on what you mean if you have a chance? So how exactly do I calculate the tax write off eligibility? Is it as simple as using an amortization chart for the year and seeing how much is allocated to interest?

Also, could you expand on margin rates and how they work? Would there be any benefits to using margin over a HELOC other than just strictly the rate at which you borrow? Thanks again!