Great article! You did a great job describing the process. Any sophisticated investor should consider this investment vehicle, and a this appears to be a creative way to maintain the tax deferral of your RRSP, while putting your money in a less volatile investment like real estate as opposed to a mutual fund. When you consider saving the fees associated with most fund managers, this becomes pretty attractive.
I believe Arm’s Length Mortgages are Canada’s Hidden Investment Gem! For the self-directed investor, who’s not satisfied with the returns on their current investments, loaning out money from their RRSP and being able to make their own rules seems almost too good to be true. But believe me – it is VERY true. Self-Directed Mortgages have been around for many years—this isn’t something new, but they are a little known product.
Kasey Young, Business Development Associate, TD Waterhouse Canada Inc.
If you are interested in this sophisticated investment strategy but currently do not have an RRSP, you could convert some of your under-performing investments into cash and then put that money into an RRSP which could get you an immediate tax refund.