Thinking of Investing in Real Estate?
Here are some questions to consider:
Type of Investment?
Multi Family ie: Triplex Duplex or a Single Unity Property
Single family ie: residential, condominium, townhome, semi detached
What is Involved in Being a Landlord?
Do you want to break even at the end of the year?
Do you want to suffer a loss to bring down your taxable income?
Do you want to create another revenue stream for your personal annual income?
POSITIVES & NEED TO KNOWS
- Pick a Real Estate Agent that has expertise in this area.
- Choose real estate that allows for huge equity growth over a 5-10 year period. Caroline can help with identifying the ideal products and locations.
- Point of consideration is when to sell, and what is your tax disposition at time of sale. Ie: Ideally when your annual income is lower. Capital gains in the year you dispose of the property?
- Caroline can help you with finding a tenant to take possession on closing date of the sale to aid in minimizing lost revenues. Example of How to Calculate Your Capital Gains: http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/ncm-tx/rtrn/cmpltng/rprtng-ncm/lns101-170/127/cmpltng/rlstt/x1_pf-eng.html
Considering new construction as an Investment Property?
Just a note … you will not be living in the property as your principal residence, therefore you are liable for the HST Component that is reimbursed to the new home builder. If you are using it asa rental property you may be able to get the HST back throughRevenue Canada. When purchasing from the builder, tell them it is for investment purposes. The builder will essentially back out the HST on the price then add it on as HST so your purchase price is essentially the same – then the builder has to complete a form online to claim back from the government. This only works if your down payment is 20% or greater.
As a tangible asset Real Estate has proven over time to generate a much larger rate of return than stocks or bonds, if it is the right product in the right location and Caroline can advise on areas with the best futuristic growth rate.
NEGATIVES TO BE AWARE OF
It takes time to dispose of the investment, usually 90—100 days. Stocks as an investment however can be cashed out in 24 hours with one phone call.
Legal Costs to Purchase the real estate may be more due to the land transfer tax, lawyer fees, and title insurance etc. However these are expenses you can rite off on your taxable income in the purchase year. On a sale all you need to worry about is the lawyers fees which are minimal.
Real Estate Fees for service on your purchase do not apply, however fees for service on the sale is a consideration. An example of a potential Real Estate fee for service is 2.5% and 2.5% to a buyer broker for a total fee to the industry of 5%.
Delivering Up Vacant Possession of the real estate may be necessary on closing and all laws must be adhered to, andCaroline can assist with serving the tenants the requisite notices needed for delivery of Vacant Possession to theBuyer on closing.
MY COMMITMENT TO YOU
I will work with you hand in hand to ensure that your investment realizes the greatest rate of return, taking into consideration type of product location, your personal goal for type of investment and length of time you want your monies to be invested. My mission is to ensure that your equity is protected.