Mortgage broker Calum Ross
bought his first property in Toronto in June 1998. Initially meant as a low-cost choice in the city’s rapidly inflaming real estate market, the purchase would eventually prove to be a most lucrative decision on Ross’s part.
Back then, Ross was attempting to complete his MBA as a working student. He recalled that his parents urged him to actually get a place and not just rent.
“I couldn’t afford to do an MBA full-time, so I scrambled. I paid $155,150, and I scrambled. I used all of my RSPs to do the First Time Home Buyers’ Plan, and I put 10 per cent down. The interest rate on the mortgage at the time was 6.88 per cent,” the broker said in an interview with the Financial Post
Ross said that he distinctly remembered being nervous about how he would actually pay off the $140,000 mortgage involved—fears that would turn out to be unfounded, as he eventually discovered.
“Fast [forward] to three and a half years later, I’ve walked away with more than $50,000 in tax-free capital gains, which—when you’re first starting out in the corporate world, and even today—is a pretty good size of money,” he said. “Since that time, I’ve bought over 20 properties. It’s turned out to be a very, very profitable thing for me.”
Ross added that his experience showed the powerful potential of housing investment.
“I had no intention of making money in real estate,” he said. “There was a stock market correction, and here I was, an MBA finance student with all the formal investment training, and I’m sitting back and thinking interestingly that I’ve accidentally built up a decent net worth in the real estate world. The stock market correction made me pause and think, ‘Maybe I should be channeling more money towards real estate.’ So that’s what I did.”
Low interest rates in Canada—largely a by-product of the U.S. subprime crisis, but still prevailing to the present—played a significant part in his real estate success story, Ross explained.
“I don’t know if it was good luck with a little bit of good judgment—there was certainly a big portion of good luck—but I’m incredibly grateful that it worked,” he concluded.
[Erratum: The previous version of this article stated that Ross was an “accidental millionaire”. This has been duly corrected as Ross never used the term in reference to himself. Apologies for the error.]