How very symbolic that the New Horizons Probe successfully reached its latest goal on New Year’s Day. It is truly inspirational for any of us thinking of resolutions or goals this January! Do you know what had to happen for the probe to reach this point in its journey?
The first ideas for the probe were initially proposed in the early 1990’s. To put that into perspective, cell phones and the internet were just barely reaching mainstream consciousness. “Streaming” as we know it today, was barely a working concept. The probe itself was launched in 2006. This is astonishing, considering that Ultima Thule wasn’t even discovered until 2014, by the Hubble Telescope. And now, New Horizons is headed out of our solar system, roaming the Milky Way, streaming data across 6.6 billion km of interplanetary space!
Kind of puts a new spin on “ET phone home,” doesn’t it?!
But imagine the early days: what has become possible in 2019, was barely imaginable in 2006 at the launch. Piece by piece, goal by goal, Mr. Frederic Pelletier and his team have persevered and continued to make slow, steady progress.
This space exploration story could teach us a lot about real estate investing. We start with a concept: buy your own house (like figuring out how to build a space probe—but for regular humans). Then when that mission is accomplished, we move on to the next goal: buy one investment property (now we launch our concept out into the investing galaxy). Now what? Careful and proactive maintenance of our property, thorough tenant management, and careful attention to details. Over time what happens? Cashflow of $200/month, becomes $2400/year, becomes $24,000 in a decade. If we start with a mortgage balance of $320,000 (80% LTV on a $400,000 home), at 4%, after 10 years the principal paydown is over $90,000 (thank you tenants!). If we give it the full amortization period of 25 years, the entire mortgage has been paid off—by the tenants! And property appreciation—well that’s your wild card. Experts often use a conservative long-term average of 3% per year. After 10 years, it is possible that a house initially worth $400,000 could be worth roughly $522,000.
So is it the ideal time to “launch” your real estate investments in Calgary? What if you take a long term approach to your goals? With the benefit of time, humble goals today can sure grow to ginormous goals in 10, 15 or 20 years! But back on earth, many are predicting low housing prices to continue in 2019. If you are like us and have long-term goals for your financial freedom, investing in a property with positive cashflow today just might get you to your Pluto or Ultima Thule in the next 10-15 years. Or maybe you’ll go farther after another 10 years? Send us a note from the Milky Way, would you?!
