I was humming a song recently and I was surprised such an old tune would be floating around in my head. Here are a few of the lyrics:

Come and listen to my story about a man named Jed
A poor mountaineer, barely kept his family fed,
And then one day he was shootin’ at some food,
And up through the ground come a bubblin crude.

Oil that is, black gold, Texas tea.

Jed Clampett became a millionaire overnight. That is not the case; his awareness of the “black gold” and the value of his real estate caught him by surprise. This discovery allowed him to explore new opportunities.  

That song came to me because of a client’s recent story. Here is a somewhat factual account of her experience. 

I was called to sit down for a chat with an elderly woman about selling her home, and after touring it, we met with her and one of her children to discuss the best options for her. Her goal was to move to a retirement community where she could live stress-free with any additional support she may require. We ended up selling her home, and she made the move. What caused me to pen this blog was that she informed me that she was living in her new apartment at no cost. 

Curious, I dug a bit deeper.

Her home was sold, and her lawyer handed her a cheque for $900,000 once the property was closed. She, in turn, had her financial planner invest the funds into the market. Since the investment was made in the spring of 2023, the market has increased by 8%  on average. Assuming a skilled investment consultant could outperform the market, let’s use 10%^ as her rate of return.

For 2023, her investment would return about $52,000 and another $90,000 for 2024. I understand that the income from the investment would be taxable, however she was correct – her investment was paying for her accommodation. It works out to somewhere around $7,500/month. 

I am the hugest believer in owning Real Estate; however, when a homeowner moves into their “sunset years,” looking at selling their property and investing, the equity begins to make sense. Over the past decade, the Dow Jones has increased just under 10%, meaning that my client may not have to touch the principal to continue to live in her new home. 

I have always believed in Real Estate ownership; however, if an owner can see more of a benefit by selling their home and having their investment return fund their life, selling can be an excellent option. I have had many clients sell and either rent or move to a retirement community with the equity in their homes paying for their new lifestyle.

If you or a family member needs assistance moving their investment in a property to an investment that will provide a return, I can be reached at lindsay@buyselllove.ca  or  905-743-5555.

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