Don't leave money on the table

February is RRSP month. It is also a good time for a mortgage checkup in order to avoid leaving  hard-earned money on the table.

Banks and mortgage lenders send out mortgage statements annually at this time of year. Some people put them in the trash, while others file them away neatly. Smart borrowers, however, submit them to their mortgage professional for review.

For example, a homeowner who has a $250,000 mortgage could save $10,000 to $15,000 or more over the next five years by taking advantage of lower interest rates and switching to a variable-rate or a lower price fixed mortgage.

For real estate investing, Calgary is a safe bet

 It was already the perfect storm for long-term real estate investing in Calgary.

Now, lower interest rates, thanks to the Bank of Canada's unexpected-but-not-unpredictable rate  cuts, are adding fuel to the fire.

Since the beginning of December, I have focused this column on the alignment of five key rules for real estate investors. The rules – only purchase revenue properties in markets where rents are rising, vacancy rates are low, net migration is positive and housing costs are, on average, less than 45 per cent of incomes – have all aligned for the first time in Calgary since 2005. In other words, Calgary is a safe bet.

Swings in economy are to be expected

Last week, the Bank of Canada surprised some Canadians when it lowered the overnight lending  rate from one to 0.75 per cent.

However, the decision to lower interest rates should not have been as big of a surprise as it was, nor should the fact that the banks have failed to lower their respective prime rates.

On the day before the rate drop, I told two separate groups of real estate investors – totaling 60 people  – that, in my opinion, there was as good of a chance that rates would decrease as there was they  would increase. The next morning, the Bank of Canada proved me right.

Rising interest rates likely to threaten bonds

Shark Tank star Kevin O'Leary took the stage to much fanfare last week at CREB®`s annual  Forecast Conference and Tradeshow breakfast, providing level-headed commentary on  entrepreneurship, investing and, of course, real estate.

What intrigued many was O'Leary's approach to a balanced portfolio and the suggestion real estate is a suitable replacement for fixed income products such as government bonds.

Potential rising interest rates in new year to coincide with growing economy

The once seemingly clear crystal ball that existed prior to the surge of Calgary housing prices in 2006 turned hazy during the global financial crisis that began in 2008 – and has  remained hazy ever since.

There have been moments since 2008 when predicting the future of interest rates seemed clear, however, other than the obvious that rates will eventually go up, predicting the timing has been elusive. Even the Bank of Canada itself has stopped providing forward-looking statements.

The market conditions in Calgary are perfect for smart, long-term investment in real estate.  The fundamentals are sound. The Calgary real estate market is showing less volatility than  in years' past. Large jumps in prices – either up or down – seem less likely than at any other time since 2006.

Combined with low vacancy rates, rising rents, positive net migration and affordability – which, according to the RBC report on housing trends and affordability, remain at historically favorable levels – now is the right time to start teaching Calgarians how to properly invest in real estate with long term wealth accumulation in mind.

Interest rate increases looming for borrowers

Heading into the home stretch of 2014 and toward 2015 is an opportune time to review or create a mortgage plan.

A mortgage plan — whether you're buying a home, already in one, or planning on purchasing revenue properties in the next few years — is vital to you and your family's overall financial health.

The last several years have been unique as a result of the 2.99 per cent mortgage craze. Banks have been highly competitive, lowering fixed rates to historical lows in an attempt to gain market share.

And in today's low-interest-rate environment, it's not a question as to whether rates are going to increase, but when. Borrowers need to position themselves in a way they can absorb higher interest rates and/or be able to still pay off their mortgages faster.

Revenue properties more stable than the stock market

What would you do if you could wake up every morning and have enough money to do  whatever you wanted to do that day?

What if you didn't have to punch the time clock, or head to the office for 9 a.m.?

What if you didn't have to let your boss determine your destiny?

Over the last couple of weeks, I've focused on revenue properties – how one client received 17 per cent returns on her first rental property, as well as three rules for buying rentals.

There's more to it than just buying a condo

In last week's column, I discussed a client who recently purchased a rental property that will    return 17 per cent annually on just the cash flow and mortgage repayment.

That's a pretty good return, especially when considering that return will increase as more principal is paid down, and as the property starts to appreciate in value.

However, there is more to consider than just buying a condo and renting it out. Our client is a smart buyer who followed three basic rules when it came to buying her investment property. While these rules are simple, they are also important.

Can be smarter than stocks or bonds
Calgarians may be surprised to find out just how profitable revenue properties are in this city – even in consideration of claims housing prices are already overvalued.

In fact, annual returns of 17 per cent, or more, before factoring in appreciation or tax benefits are not uncommon. All you need to get started is a 20 per cent down payment, which can be as little as $30,000 – or $15,000 if you partner with someone – decent credit, and the ability to think long term.