We Make $280k Per Year And Are In Our 40s. Can We Afford To Decouple And Buy A Second Property?

  • April 14, 2023
  • 10 min read
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CH Property
CH Property
9 months ago

Hi Ryan – question on the comparison between investment vs a 900K rental property. A loan of $500K was taken to pay for the property over 22 years. This means that an additional 500K was injected over 22 years (outside of interest which was accounted for) to reach the final property value at 30 years. Did you also consider to also add that 500K into the investment side? I have previously done a similar calculation, and when I input your numbers, at the 20 year mark, both tracks are similar in value (within uncertainty) and at the 30 year mark, the property track was a clearer winner.

Stacked Homes
9 months ago
Reply to  CH Property

Hey CH Property! You’re absolutely right here. We did consider this but the analysis became quite long and confusing, so we kept it brief here. If we had gone down that route, we’d have to factor in cost to maintain the property which includes maintenance, taxes, rental vacancy, agent fees etc. In the end, it was more important to focus on the benefit of having a second property later on which they can sell for cash or to move into.

9 months ago

Hi Ryan, I think the couple’s initial purchase price for Twin Vew should be taken into consideration for the decouple calculation as the capital gain from that property can taken in consideration by the bank to offer additional loan for Twin Vew during the decouple. The cash proceed from the capital gain could be used to supplement as the downpayment for the next property for decoupling option to be viable instead.

Stacked Homes
9 months ago
Reply to  Brian

Hey Brian! This would be a home equity loan, something that can be taken but not for the purchase of property. We’ve described this in our article here.

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