A client thought he was losing 700 dollars every month.
Victor believed he was short 700 dollars every month on his rental. Because of that, he stopped investing. But the problem was not the property. It was the way the money was moving.
A client thought he was losing 700 dollars every month.
He was not.
Victor owns a house and a condo.
For years, the condo paid for itself.
Then interest rates went up.
Rent went down.
Victor believed he was short 700 dollars every month on his rental.
Because of that, he stopped investing.
But the problem was not the property.
It was the way the money was moving.
What the numbers looked like:
Rent coming in
2,600 per month
Rental expenses
3,300 per month
On paper, that looks like a 700 dollar loss.
What we changed:
We did not change the debt.
We did not change the interest rate.
We only changed the flow of money.
Instead of using the rent to pay rental bills, Victor used the rent to pre pay his home mortgage.
Because he had the right mortgage setup, every dollar paid to principal became available on his line of credit.
He then used that line of credit to pay the rental expenses.
What happened next:
The 700 dollar shortfall disappeared
The 700 dollars went back to investing
His home mortgage started shrinking much faster
He cut 156 months off his mortgage
He avoided about 470,000 in non deductible interest
The rental interest became tax deductible
His long term net worth improved
Same debt.
Same income.
Smarter structure.
This is called cash damming.
It is not about taking more risk.
It is about using the right mortgage and moving money correctly.
If you own a home and a rental property and feel cash tight, this might be why.
Learn how cash damming works here:
cashdamming.arcmortgage.ca/start-page
If you want to run your numbers, message me.