Looking at an investement in Real Estate

[PickyTooth]

I'm looking at investing 100k in a 300k condo.

Now I have the 100k but I've been reading that it might be better to get a loan instead of using my money now.

Could someone explain this to me ?

Also if someone has charts on how real estate has grown in the past that would be great. I live in Montreal, and I cant seem to find anything on google for this.

Thanks,

-Shawn

[destro]

Putting down 33% is great cause it reduces your mortgage payments. You can put as little as 5% down but you'll be spanked with 2-3% on the principal in CHMC loan insurnace.

Using only 5% of your money means that you need to make more intrest on the rest of your cash than you would be saving by putting it as a down payment.

So if you got a standard locked in 5 year rate at about 4.8% then you'll have to make more than that to make it worth while. Also take into account that you'll be hit with the 2-3% loan insurance so that means you'll need to make even more than 5% to make it worth while. There are other factors of course but this is just the short story. Of course its possible to make more than 5% but it will require time and effort and of course risk. Since your already buying the propery your not really risking anything to gain that 5% on your money so putting the whole 33% down is not a bad idea.

FYI 25% is the minimum you need to NOT be charged the loan insurance (CHMC)...(20% down you pay about 1%, 10% you pay about 2% etc)

Also ..300K for a condo in Montreal ..is it an 8 bedroom? Thats seems really expensive in a city where the rent is about 40% cheaper than Toronto (where I live). 300K here will get you an above average 2-3 bedroom. Many one bedroom condos in great areas are no more than 220K. Id be really worried if someone I knew was buying a 300 K condo in montreal. Im assuming youd be living in it so Im assuming its jsut a nice/big place. If your planning on renting it out Id be very cautious about paying that much.

[PickyTooth]

Thanks for all the help,

I think I didn't express myself clearly.
It's my parents that are buying the condo for 300k, and i will buy 1/3rd of the condo.

It still comes out to the same to see if I can make more money investing the 100k then I would the interest on the loan.

Also it's a very high end condo thus the high price.

Anyways thanks alot for the help