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RRSP/RESP/Mutual Funds vs. Real Estate

One of the most common questions I encounter in potential homebuyers is:

“What should I prioritize? RRSP/RESP/Mutual Funds OR Real Estate? 

We have touched on this topic before, but today we are going to dive a little deeper.

The answer to that question is easy in an ideal world. In an ideal world, I would say: 


Both are powerful tools for building your financial portfolio. However, depending on a potential client’s situation, the option for both may not be available. In that case, I always have to recommend real estate before other financial products.

And there is one major reason why: real estate allows you to leverage SOMEBODY ELSE’S money in addition to your own, whereas RRSP/RESP/Mutual Funds only build on your own hard-earned cash. 

Let me break it down for you.

Real Estate allows you to put down only 20% of the total property value (your own money) and let someone else pay off the mortgage for you (your tenants). Here is a breakdown – the numbers don’t lie! 

To show the difference, we need to compare apples to apples. 

In this example, we will assume you are putting $400/mo. away into an RESP, RRSP, TFSA, Mutual Funds or Savings Account. 

RRSP/RESP/Mutual Funds 

$400 investment each month
12 months/year
15 years
4% Annual return on investment 

$98,436 = Total Savings After 15 years 

Real Estate Investment 

$400/mo. would be the approx. cost to borrow a 
$100,000 Down Payment 
$400,000 Mortgage
= $500,000 Investment Property 

15 Years Of Ownership 
4% Annual Appreciation 
= $900,471 after 15 years 

Mortgage remaining after 15 years = $246,189 
Equity created in property $654,282 – $100,000 Initial down payment 
$554,282 = Total Equity After 15 years 

$98,436 vs $554,282 (560% Higher Return on Investment) 

But What if… 

Real Estate only appreciated 2% instead of 4%? 


Mutual Funds/RRSP/RESP return was 8% instead of 4%? 

= $138,415(Investments) vs. $326,795(Real Estate) 

188% Higher Return on Investment 


No matter what the market conditions, real estate always wins. Now, every household is different, and I’m not saying investing in real estate makes sense for everyone, but it does for A LOT of people. 

If you want to see if this is possible for you, get in touch with me! I’d love to schedule a discovery call with you. Until next time!