I Sold My Investment Property… And the Money Is Gone (Here’s Where It Went)

Recently, I sold an investment property that I originally planned to hold forever.And now?

• The profits are basically gone
• Not wasted—but fully deployed

So I wanted to break this down transparently:

• What I made
• What I paid in taxes
• Where the money actually went
• And what this might mean for you as a real estate investor in Canada

This is especially relevant if you’re watching markets like Surrey or the Fraser Valley and wondering:

• Should I hold?
• Or should I cash out?

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The Numbers: What I Actually Made

Let’s start with the real numbers:

• Purchase price: $465,000
• Sale price: $532,000
• Down payment: ~$93,500
• Net proceeds after sale: ~$197,000

That’s roughly:

• A doubling of my invested capital over ~5 years

Sounds great, right?Well… here’s where it gets more real.

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Capital Gains: The First Hit

Estimated gain:

• ~$60,000 (being conservative)

In Canada:

• 50% is taxable → $30,000 added to income
• Split between my wife and I → $15,000 each

That’s manageable—but it still creates a tax problem.

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Step 1: RRSP Contribution (Tax Strategy)

First move:

• ~$70,000 into RRSPs

Why?

• Reduces taxable income
• Defers taxes to retirement
• Potentially creates a tax refund

Effectively:

• We offset the capital gain
• Lowered our overall tax burden significantly

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Step 2: TFSA Contributions (Tax-Free Growth)

Next:

• $20,000 each into TFSAs → $40,000 total

Key benefit:

• No tax deduction upfront
• But ALL future growth is tax-free

This is one of the best long-term wealth tools in Canada.

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Step 3: Investing the Money (Not Just Sitting in Cash)

Important point:

• RRSPs and TFSAs are NOT savings accounts

We invested the money into:

• ETFs (exchange-traded funds)
• Broad market exposure

Typical allocation:

• ~20% Canadian dividend fund
• ~20% S&P 500
• ~20% total market fund
• Smaller allocations:
  • NASDAQ 100
  • Canadian sectors
  • Individual stocks
  • Bitcoin ETF
  • Gold

Strategy used:

• Dollar-cost averaging (monthly investing)

This reduces risk vs dumping money in all at once.

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Step 4: Mortgage Paydown

Next move:

• $10,000 lump sum on primary residence

Why?

• Paying down non-deductible debt = guaranteed return
• Reduces long-term interest costs

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Step 5: Home Improvements & Debt Cleanup

We also:

• Renovated part of the home
• Paid off ~$40,000 line of credit

Upgrades included:

• New bedroom
• Paint throughout
• New appliances
• Interior improvements

This does two things:

• Improves quality of life
• Increases resale value

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Step 6: The Reality of Homeownership Costs

Remaining funds (~$37,000):

• Going toward a new roof and gutters

This is the part people forget:

• Real estate profits often get recycled into maintenance

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Step 7: Yes… Some Fun Too

Not everything was spreadsheets and investing:

• Family trip planned
• Considering restoring an old car

Because what’s the point of investing if you never enjoy it?

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Key Takeaways (This Is the Important Part)

Here’s what this experience really shows:

• “Profits” don’t just sit in your bank account
• Taxes take a bite
• Smart planning reallocates the rest
• Real estate gains often get reinvested—not spent

And most importantly:

• Wealth isn’t lost—it’s repositioned

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What This Means for You

If you’re in markets like:

• Surrey
• Fraser Valley
• Greater Vancouver

You should be asking:

• Does holding still make sense?
• Or is it time to redeploy capital?

Because right now:

• Prices have come down
• Opportunities exist in multiple asset classes
• Liquidity (cash) has real value again

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Final Thought

From the outside, it looks like:

• “The money is gone”

But in reality:

• It’s working harder than ever
• Just in different places

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Written by:
Steve Karrasch PREC
Karrasch Real Properties Team
Macdonald Realty