If you would like mortgage refinancing be able to use your rrsp money to fund real estate then you need to set up a self directed rrsp mortgage. Once you have done this you can use the money to buy real estate with a real estate investor. You would make money inside of your rrsp at an agreed upon rate of return that would be secured to the real estate. This is better then mutual funds and the stock market in most cases.
The problem with this is not so much the real estate going down in price, but the investor you are investing with. If you are investing with someone that is not experienced in real estate then you may lose money. Simply because this person may have bought the property in a wrong manner, or maybe they do not know how to manage the property. Any properties I have been involved with we have always used a certain buying criteria. Yes, this protects the investor, but protects us as well. And anybody who you are going to invest with should have some form of buying criteria.
There is other types of mortgages that you can invest in without having to be self directed. Some give normal returns, while others give returns of up to 23%. But do your homework before pursuing. As with any investment you need to know all you can before making the investment.
How to Set up a Self Directed RRSP Mortgage
Here in Edmonton, I use a Calgary company. I do not work for the company, but can not use their name freely. The way I found them though was to call up my bank and ask where I could do this the easiest. Of course they were not wanting to give the info, but that is the easiest way. Or you can contact me and I will send you a private email.
After you set up an account with a trustee you will be able to lend your rrsp money to the highest bidder, or maybe more important the most secure bidder. Why take 15% from some hotshot when you can make 12% from as astute investor? Not sure about you but the extra 3% does not make sense with the 3-4 times risk involved. But that is just my thoughts.
Whatever your reason for wanting to do this know one thing. That you can not under any circumstances set up a self directed rrsp mortgage then go and buy an investment property yourself. Or with a partner, or with any family member. In fact the rule states you must be outside of arms reach to invest your rrsp mortgage with that person. And arms length means any relationship through blood or through marriage.
Interested in getting a return of 23% per year in your rrsp, tied to real estate? check out Best RRSP Rate
Kelly Kramer owns a plumbing company and buy and sells real estate, if you liked this article you can learn more at http://www.edmontons-business-directory.com
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