# How to profit from Real Estate in terms of increased tax returns and joint incomes?



## baconbit (Oct 18, 2017)

So I recently bought another property for income, and now that I have a tenant living there I am collecting supplemental income on top of my Employment income.

Is there effective and legal ways to maximize tax returns given your employment income is already fairly high (in my case just barely over the limit where i am in the highest tax bracket from employment income alone)?

I've been doing some level of research and from what I understand I'll consider all my income be incurred via sole proprietorship when i file for my taxes. 

The question that I am asking with the OP is that, is *CAN* real estate investing be an effective means of reducing taxable income given you already work a high taxed paying job? 

I am investing in real estate for the passive income not the capital appreciation, so all my properties are not expensive but they most definitely will not appreciate as quickly as RE in more urban/urban booming areas. 

Will this strategy be effective in the long term, or will it become a liability? The reason why i ask is because I don't know anyone who has ever took an approach at increasing their tax returns to maintain more wealth. That being said i am just hitting the ground and running with this idea. 

The ultimate goal isn't to be mega rich, rather the goal is to achieve FI early in life.

for the sake of the OP lets say Vacancy is 85% but costs of operations are very low like property taxes/no insurance/very small loan to income ratio


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## Just a Guy (Mar 27, 2012)

Umm, I’m not sure I understand your question. You are going to increase your income because you have a passive income stream. Unless you want to lose money (never a good plan) you will increase your taxable income. Paying more taxes isn’t a bad thing, you’re making more money. 

Now, not all your passive income may be taxable, if you own enough properties (it used to be a minimum of 3, I don’t know the current rules), you could write off a number of things like travel to inspect the properties, tools, office supplies, interest, accountants, etc. You still don’t get more money in your pocket, but you get benefits.

You get rich in real estate not by lowering your tax bracket, or even the benefits, you get it from the fact that other people will pay off your property and all the expenses along the way. In 20 years, the property is paid off and probably worth at least what you paid for it adjusted for inflation...which you got for basically nothing out of pocket (if you did it right).


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## baconbit (Oct 18, 2017)

I guess one element to these properties is that it cost money to set up, in my case I am working on buying my 3rd property this summer.

Because i have the land already, I still have to pay subdividing fees, surveying fees, contractor fees, buying the home itself(will do it cash), my guess is doing this and setting up another lot and mobile home will cost me 20-25k out of pocket if i am being optimistic. by rights should i be able to write off all those expenses after all i am spending my after tax dollars building my business. 

I like reducing taxable income in more meaningful ways than simply plugging into my RRSP(already have >$150k in dividend growth stocks DRIPping, with more 30 years to compound before i hit 60). Truth be told i don't think I need to put another cent into that account. but my problem is i still want to increase my tax returns. 

Right now im trying to find the right tax lawyer to help me create a business plan and maximized my legal rights to play the game.


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## Eclectic12 (Oct 20, 2010)

baconbit said:


> ... The question that I am asking with the OP is that, is real estate investing an effective means of reducing taxable income given you already work a high taxed paying job?


Where the expenses are less than the rental income ... no. 
I'd be happy to help you out by having you sell me the property for a loss. :biggrin:




baconbit said:


> ... Will this strategy be effective in the long term, or will it become a liability?


Not sure what you mean by "become a liability" so I will wait for your clarification.




baconbit said:


> ... The reason why i ask is because I don't know anyone who has ever took an approach at increasing their tax returns to maintain more wealth.


Where "increasing their tax returns" means "increased taxable income" - this seems pretty similar to someone buying stocks that pay taxable income or bonds or GICs in a taxable account.
The annual income goes up with a potential future capital gain.




baconbit said:


> ... The ultimate goal isn't to be mega rich, rather the goal is to achieve FI early in life.


The alternative would be to do nothing or put one's cash under a mattress ... but that won't bring one closer to FI early in life.


Cheers


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## baconbit (Oct 18, 2017)

Eclectic12 said:


> Where the expenses are less than the rental income ... no.
> I'd be happy to help you out by having you sell me the property for a loss. :biggrin:
> 
> 
> ...



expenses with my first rental involved:

Notary stamp and paper work $500
cleaning services to clean unit $500
renovations supplies, tools, and materials $2500-$3000 
utilities bills while unit was empty $400
Lack of tenant for 2 months $1500 of potential earns missed. 
I've been storing my receipts, I also have a fence that i built for this property as well $3500

Well I think of it this way, yes I will be increasing Taxable income, but for the first couple years of my endeavor there are big bills to pay. I figure in the year after when I claim all those expenses, I'll get a handsome tax return, plus I'll be able to quit my job and work only casual to control my taxable income(given I have paid off all my debt by then which is part of the plan).


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## Just a Guy (Mar 27, 2012)

You can’t claim income you never made, so you can forget about lost rent. 

You also want to finance stuff as much as possible (since the interest is written off and someone else pays for it eventually), so don’t look to pay for anyipthing in cash, also try to finance the property purchase 100%. 

I think you also need to do a little more research into things, you don’t seem to understand the basics of making money and increasing wealth...you seem to be looking for tax evasion strategies which is never a good thing. Not saying you’re doing it intentionally, just that is the path you seem to be looking to go down. More income means more wealth, it also means more taxes. That’s the way life works. You can defer taxes with things like your capital gains, but if you’re increasing your wealth, you’ll increase your taxes.


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## baconbit (Oct 18, 2017)

Just a Guy said:


> You can’t claim income you never made, so you can forget about lost rent.
> 
> You also want to finance stuff as much as possible (since the interest is written off and someone else pays for it eventually), so don’t look to pay for anyipthing in cash, also try to finance the property purchase 100%.
> 
> I think you also need to do a little more research into things, you don’t seem to understand the basics of making money and increasing wealth...*you seem to be looking for tax evasion strategies which is never a good thing.* Not saying you’re doing it intentionally, just that is the path you seem to be looking to go down. More income means more wealth, it also means more taxes. That’s the way life works. You can defer taxes with things like your capital gains, but if you’re increasing your wealth, you’ll increase your taxes.



doesn't change the fact it is a legitimate business with legitimate expenses where a service is being provided. It cost money to make money. I am doing my best to have the cake and eat it too. I spoke with an accountant and any materials and services i purchased to flip my income properties are 100% claimable. I mean I found a way to own properties without letting the banks/lawyers/RE agents finesse me of a mortgages and all the other extra costs of buying a home. then again maybe i just got lucky because of my lack of thoughtfulness  either way I plan on being legit, don't hate the player hate the game boyo.


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## AltaRed (Jun 8, 2009)

baconbit said:


> expenses with my first rental involved:
> 
> Notary stamp and paper work $500
> cleaning services to clean unit $500
> ...


Some of your expenses are operating (current year) 100% write offs. Some of the others are to the capital account, i.e. add to ACB, and depreciable via CCA. Do you know anything about how to manage the various costs for tax purposes? You need to spend some time understanding all that. Perhaps even engage an accountant for a year or two to get it right.


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## Eclectic12 (Oct 20, 2010)

I'm still not clear on what the "strategy be effective in the long term, or will it become a liability?" is about.



baconbit said:


> expenses with my first rental involved ...


JAG has already covered that you can forget about claiming the lost rent. The other expenses that are allowed and don't have to be spread over several years, likely will net out to having less rental income to report. 

Whether the net effect is to lower taxable income enough that you over paid taxes to generate a refund is not clear. Personally, I'm not a fan of having to wait for my money back through a tax refund so I'd also be looking at ways to reduce the tax withheld. https://www.canada.ca/en/revenue-agency/services/forms-publications/forms/t1213.html


It is strange to me that you seem to be interested in generating a refund yet it sounds like one of the main sources of expense, the mortgage or loan interest is low. I'm also not sure that going with what looks like "no insurance" is a good long term move.




baconbit said:


> Well I think of it this way, yes I will be increasing Taxable income, but for the first couple years of my endeavor there are big bills to pay. I figure in *the year after when I claim all those expenses, I'll get a handsome tax return*, ...


Sounds like you need to do more research and get a better handle on rental expenses as my understanding is that they can vary as to what year as well as whether they can be claimed.

For example, should this be your only rental property, even if you met all the criteria for motor vehicle expenses for other purposes, collecting rent is not deductible. More than one rental property opens up collecting rents as well as other activities to deductible.

https://www.taxtips.ca/personaltax/propertyrental/rentalexpenses.htm





baconbit said:


> expenses with my first rental involved ... plus I'll be able to quit my job and work only casual to control my taxable income(given I have paid off all my debt by then which is part of the plan).


That's fine ... the focus on tax refunds as well as expenses suggests there is a learning curve that needs to happen.

Then too, I have met people who used accumulated rentals to become FI so it's not a new thing.


Cheers


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## Eclectic12 (Oct 20, 2010)

baconbit said:


> doesn't change the fact it is a legitimate business with legitimate expenses where a service is being provided ... I am doing my best to have the cake and eat it too. I spoke with an accountant and any materials and services i purchased to flip my income properties are 100% claimable ...


The attitude of "have the cake and eat it" with what looks like limited knowledge suggests you may make some assumptions or miss details that could get you into trouble. Replacing a toilet or sink can be an expense or it can be capitalised ... are you aware of how to figure out which is which? Or are you assuming you will have an expense deduction to later have the accountant tell you it's not?




baconbit said:


> ... I mean I found a way to own properties without letting the banks/lawyers/RE agents finesse me of a mortgages and all the other extra costs of buying a home ...


Since you are looking for deductions that will help reduce your rental income ... I'm not sure why you are happy to have kept to a minimum one of the biggest ones, mortgage/loan interest. For the period you are working at a high income, this seems a strange approach to me.


Cheers


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## baconbit (Oct 18, 2017)

AltaRed said:


> Some of your expenses are operating (current year) 100% write offs. Some of the others are to the capital account, i.e. add to ACB, and depreciable via CCA. Do you know anything about how to manage the various costs for tax purposes? *You need to spend some time understanding all that. Perhaps even engage an accountant for a year or two to get it right.*


Spoke with my accountant last week about the matters and he says I'll be able to claim many expenses and then even brought up ideas about incorporating that might fit into my business plan. As well began reading books on tax return maximization in Canada for small business owners. On Top of that I am waiting to hear back from a tax lawyer as i have plans to hire one to make sure i am within my legal boundaries yet maximizing my rights, as a entrepreneur. Not to mention will help me formulate a solid business plan in terms f taxation planning. Might even have to step up and record my actions in a business journal for extra authenticity


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## AltaRed (Jun 8, 2009)

Of course you can claim many expenses. Just know which ones are operating costs and which are capitalized.


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## Just a Guy (Mar 27, 2012)

Also the rules of incorporating have recently changed. The feds don’t like “holding companies” anymore, so the tax rules have changed.

I always like it when a new “whipper snapper” comes along thinking they’re much smarter than everyone else.

Hate to break it to you but you’re just a novice with a couple of places...there are many on this forum who’ve played the game for years, decades even and have many more properties than you do. There are some who bought more in the last six months than you own or may ever own. I’d be careful about your attitude towards them...

But then again, what would I know. Enjoy your first audit, and you will get audited someday.


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## baconbit (Oct 18, 2017)

Just a Guy said:


> Also the rules of incorporating have recently changed. The feds don’t like “holding companies” anymore, so the tax rules have changed.
> 
> I always like it when a new “whipper snapper” comes along thinking they’re much smarter than everyone else.
> 
> ...


lol like I care if another person has more property than me. I know what I am aiming for which is FI and sooner the better. No need to try and be the wealthiest person on this forum we all end up decomposing in the same dirt anyways, I just have a clearer vision of the battles i want to pick and choose than most. I am not one to suffer paralysis from analysis, more of a doer than a sayer.


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## Just a Guy (Mar 27, 2012)

I’m sure your probably better, faster and smarter than others on here...forget about these fools who’ve been dealing with all the problems for years...they’re old and stale.

You should probably think about writing a book to guide the new generation so they can follow in your footsteps. These other duds don’t know anything about maximizing profits, or being successful.

I’ll await your updates so that I may learn from a master. I’ve always had an interest in real estate...just lacked the guts I suppose.


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## baconbit (Oct 18, 2017)

Just a Guy said:


> I’m sure your probably better, faster and smarter than others on here...forget about these fools who’ve been dealing with all the problems for years...they’re old and stale.
> 
> You should probably think about writing a book to guide the new generation so they can follow in your footsteps. These other duds don’t know anything about maximizing profits, or being successful.
> 
> I’ll await your updates so that I may learn from a master. I’ve always had an interest in real estate...just lacked the guts I suppose.


considering I've been in the highest tax bracket and investing since i was 22 years old I guess i may have had an unfair advantage with money and time being on my side


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## Just a Guy (Mar 27, 2012)

Yep, I expect you’ve lived through just about everything life could throw at you...unlike those who’ve only experienced a bull market their entire life. 

I look forward to your insight on creating more income while paying less taxes, that alone will be worth the price of the book.


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## baconbit (Oct 18, 2017)

Just a Guy said:


> Yep, I expect you’ve lived through just about everything life could throw at you...unlike those who’ve only experienced a bull market their entire life.
> 
> I look forward to your insight on creating more income while paying less taxes, that alone will be worth the price of the book.


hmm, I wonder where i will start, maybe with the time i got a $14k tax return in 2015 without having the need to be a company owner (no audits needed as the government already knows they would be wasting their time)

shhh no tears boyo


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## Just a Guy (Mar 27, 2012)

Tax returns are one thing, that just means you gave the government too much money in the first place...I’m awaiting the refunds you’ll get without having paid any deductions. Free money from the government, that’s the ticket I’m sure you’re about to punch.


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## OnlyMyOpinion (Sep 1, 2013)

The terminology is confusing me. What is business journal authenticity? How to tax returns have so much value compared to the tax refund I might get? Has the book been written yet and can I order it somewhere? I don't mean The Simple Solt'n JAG, I have it. I mean the OP's book.


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## Just a Guy (Mar 27, 2012)

That book is trash, I can’t believe anyone would waste money on it. It’s so basic, and it’s only about buying places. That guy doesn’t save tax money and I think he only owned a couple of places total. 

Bacon bit will lead everyone to the promised land. Imagine no more taxes, infinite income. No need for banks either, they just screw people anyway.


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## OnlyMyOpinion (Sep 1, 2013)

:encouragement:


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## baconbit (Oct 18, 2017)

Just a Guy said:


> Tax returns are one thing, that just means you gave the government too much money in the first place...I’m awaiting the refunds you’ll get without having paid any deductions. Free money from the government, that’s the ticket I’m sure you’re about to punch.


Hard for your business to be taxed heavily when its not making profits, chances are for the first couple years my expenses will greatly out match my profit, but it doesn't change the fact it's a legit business. 

by the Time I get my tax refund I'll have a paid off money printing machine with it. 

double win you could say. hehe

sure i didn't make profit due to my expenses at least I will have not only invested in something tangible that is mine. but managed to put myself in a lower tax bracket in the process. sounds like free money to me. Ever take a moment to think maybe that success begets more success?

l i ain't stessin, just curious to see if anyone has ever dabbled in this method of wealth accumulation

and thanks to those heavy RRSP contributions I can rest assure I got a fat tax return a self generating retirement plan. another case of free money you could say!

in the highest tax bracket but only paid the government 19% after i got my return. 

success begets success, not sure why you are coping so hard



OnlyMyOpinion said:


> The terminology is confusing me. What is business journal authenticity? How to tax returns have so much value compared to the tax refund I might get? Has the book been written yet and can I order it somewhere? I don't mean The Simple Solt'n JAG, I have it. I mean the OP's book.


business journal is exactly what it sounds like, a book you organize and record your activity as a business owner so when you have receipts you have stories and evidence to back up what you did in the event of an audit. 

(as a bonus that book would technically be a write off as well  )

and no this book hasn't been written but if my process actually work i might just write a book, and start a little e book company, would be nice to have more Write off using that avenue to make money.


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## Just a Guy (Mar 27, 2012)

So the more money you lose, the higher the profits...I get it, since losses drop your personal income. The government covers the loss, I’ve seen that happen in the past. 

What kind of properties are you looking at? And how can we buy them without money or the banks? The more you pay, the greater the loss right?


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## baconbit (Oct 18, 2017)

Just a Guy said:


> So the more money you lose, the higher the profits...I get it, since losses drop your personal income. The government covers the loss, I’ve seen that happen in the past.
> 
> What kind of properties are you looking at? And how can we buy them without money or the banks? The more you pay, the greater the loss right?


guess you'll just have to wait until my book comes out boyo.

Maybe you'll learn something from it, but i'd rather you pay me for that information instead of getting it from this thread for free lol


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## Just a Guy (Mar 27, 2012)

But if you pay people to buy your book, you could claim the loss and make even more than if you actually sold the book. You’re breaking your own investment rules.

As far as I know, you’d be the first to have a negative charge on a book.


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## baconbit (Oct 18, 2017)

Just a Guy said:


> But if you pay people to buy your book, you could claim the loss and make even more than if you actually sold the book. You’re breaking your own investment rules.
> 
> As far as I know, you’d be the first to have a negative charge on a book.


strong coping mechanisms, just lol


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## AltaRed (Jun 8, 2009)

Where are the moderators on this useless drivel?


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## Just a Guy (Mar 27, 2012)

Alta, you’re just an old dud...this is the new way. Like when companies didn’t need profits during the 90’s. This is the new, new economy...and bacon but is our prophet.


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## Eclectic12 (Oct 20, 2010)

baconbit said:


> Spoke with my accountant last week about the matters and he says I'll be able to claim many expenses and then even brought up ideas about incorporating that might fit into my business plan. As well began reading books on tax return maximization in Canada for small business owners ...


Good ... that will help you out for either doing it yourself or being able to spot if the accountant is leading you astray.




baconbit said:


> ... lol like I care if another person has more property than me ... just curious to see if anyone has ever dabbled in this method of wealth accumulation ...


The part about " many on this forum who’ve played the game for years" says there are people who have done this.

This may be an overreaction or miscommunication or something else. From my point of view, more property = more experience plus likely seeing a broader range of what's out there. This seems to be the types who would be best positioned to answer "Will this strategy be effective in the long term, or will it become a liability?"




baconbit said:


> ... and thanks to those heavy RRSP contributions I can rest assure I got a fat tax return a self generating retirement plan. another case of free money you could say!


Not sure if it is your choice of words or whether the RRSP cycle is only half understood. I also suspect you mean "fat tax refund" instead of a "fat tax return".

My apologies if you already know this but the RRSP contributions made that are deducted from income are converting taxable income this tax year to a future taxable income, at an unknown date with an unknown tax bill. It is not "free" like the TFSA as there is still income to report with the potential for taxes to pay.

At the future date when the RRSP or RRIF withdrawals are made, other sources of income such as rental income, pensions (gov't and/or private), investments etc. set the level the RRSP/RRIF withdrawal will be taxed at. Should this combination put one at or close to the top rate - you will still be paying close to or a top tax rate.
https://www.getsmarteraboutmoney.ca/plan-manage/retirement-planning/rrsps/how-rrsps-work/

Depending on how the RRSP contributions were made/deducted - there might not be a tax refund associated with the deduction. For example, I contributed to a company Group RRSP from my overtime. My employer did not withhold taxes so there was no refund. Had I not deducted the RRSP contributions, I would have owed income tax as none was withheld.


You might have a lot of time to plan for it ... but have you thought about what income you estimate you will have when the RRSP/RRIF withdrawals happen?


Cheers


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## sags (May 15, 2010)

And then there was the Synergy Group plan, where people invested thousands to buy business losses from companies and claim tens of thousands in tax refunds.

Last I heard the regulators got involved, the RCMP got involved, promoters were arrested, investors lost all their money and had to pay back the refunds plus interest and fines.


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## baconbit (Oct 18, 2017)

Eclectic12 said:


> Good ... that will help you out for either doing it yourself or being able to spot if the accountant is leading you astray.
> 
> 
> 
> ...


I guess i could explain how i plan to set up my next property without any banks/lawyers/RE agents. However I do not acknowledge sarcasm, and maybe if JAG asked really nicely and politely i could further expand. 

So anyone who has been able to acquire a multiple properties without needing to take on debt that would take years to pay off I am curious how else you could do it (besides my method). Just because its not a common way to do things doesn't necessarily mean its the wrong way. unconventional means yield unconventional results, I don't mind take the road less traveled and experimenting. Unlike some people, I have nothing but time(and use that cushion of time to leverage against risk), and have used this mind set to make several decisions which have so far worked very well for me (after all I've been pursuing FI for the last 6 years and my plans are starting to come to fruition).

Oh i am well aware that money coming out of the RRSP is taxed. I actually haven't put any money into my RRSP in a couple years now, and I am jut glad i had it set up initially as time is doing the rest of the work for me. And if i get taxed heavy on when i pull it out I won't be too heartbroken as im used to being taxed heavy already, after all i only had to contribute to my RRSP for 4 years and the time did rest of the building(given it compounds for 30 more years), i am not going to stress about taxes when i pull out, I think i'll still have more than enough funds to be comfortable from my RRSP alone given I stay debt free.

I'll still max out my TFSA, in the coming years I'll have my beach condo paid off in dec 2019 and i'll have 4 fully paid off units to make income from. Again I am meeting with a tax lawyer to see where my rights are as a i own international RE(i don't think i'll have to pay any Canadian tax on that income as it already paid its state tax in it's originating country. but will check with a legal rep). 


So really i own 3 properties already, and i am inquiring about my 4th one i plan to buy cash. 

I think by the time i own 4 properties debt free I can take a step back and not have to worry about a full time line of work. after all that's the end goal.


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## Just a Guy (Mar 27, 2012)

Maybe you should PM Muck, 

He’s a lawyer and a real estate investor who has a secret sauce to never get a bad tenant. If you two combine, you should have the perfect wealth creation system.


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## Eclectic12 (Oct 20, 2010)

baconbit said:


> I guess i could explain how i plan to set up my next property without any banks/lawyers/RE agents ...
> So anyone who has been able to acquire a multiple properties *without needing to take on debt* ...


That's where you seem to be differing from most other RE types ... they want the debt to be paid by their tenants as it gives them typically a sizeable deduction to keep the rental income low and possibly allow them to deduct against other income.

I'm guessing that as you want to leave the job in the short term, debt with it's associated deduction is not what you want.




baconbit said:


> ... Oh i am well aware that money coming out of the RRSP is taxed.


Good as some of the terms made it sound like the tax deferment was being missed.




baconbit said:


> ... i'll have 4 fully paid off units to make income from. Again I am meeting with a tax lawyer to see where my rights are as a *i own international RE(i don't think i'll have to pay any Canadian tax on that income as it already paid its state tax in it's originating country*. but will check with a legal rep).


It will be good to check with the expert. 

My understanding is that Canadian tax residents have to report world wide income ... which includes income from a foreign rental, regardless of whether foreign state tax was paid or not. 
https://www.taxtips.ca/personaltax/whopaystax.htm

A tax treaty between the two countries may reduce the amount the foreign country charges. The foreign tax credit (FTC) may reduce or eliminate the foreign tax already paid from the Canadian tax bill. Where the Canadian tax bill is higher than the foreign one (usually the case from posts I have read) - the net Canadian taxes will be lower than had it been a Canadian based rental but taxes will still be need to be paid.



> Reporting Income
> *You must also report any income you earn from foreign property, no matter how small the amount, and even if the property itself is not reportable.*
> For example, if you own an apartment in Turkey that is worth $80,000 and is your only foreign asset, and the apartment gives you a rental income of $400/month, you do not need to report the apartment itself but you do need to report the rental income.


https://drache.ca/articles/reporting-foreign-property/
http://madanca.com/blog/tax-implications-of-canadian-investment-in-a-florida-rental-property/ 

There may be changes in values due to currency exchange as well.
https://www.taxtips.ca/filing/foreignamounts.htm


As well, should the CAD cost of *all foreign property* (rentals are considered property while personal use is not) be over $100K during the year, a T1135 "Foreign Income Verification Statement" has to be filled out. https://www.taxtips.ca/filing/foreign-asset-reporting.htm


How long have you had the foreign rental?
Has your accountant been reporting the income and possibly filing a T1135 as part of your Canadian tax return?



Cheers


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## Mortgage u/w (Feb 6, 2014)

You posted a question but do not want to acknowledge any answers. You already seem to have the secret to success - what else can this forum provide you?

Not sure what your "unconventional" strategy is to purchase rental properties mortgage free......unless you are borrowing from a private "buddy"? Even so, why forfeit the benefits of owning income generating properties using other people's money all the while offsetting your gains ?? 

At a quick glance, it seems to me you are purposely buying negative cash-flow properties with the hopes they will be worth billions one day.

Lets just hope you are a valued employee.


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## baconbit (Oct 18, 2017)

Eclectic12 said:


> That's where you seem to be differing from most other RE types ... they want the debt to be paid by their tenants as it gives them typically a sizeable deduction to keep the rental income low and possibly allow them to deduct against other income.
> 
> I'm guessing that as you want to leave the job in the short term, debt with it's associated deduction is not what you want.
> 
> ...


the hassle and price of fees , debt and mortgages aren't worth it imo. my second income property was $45k(land and home), this 4th property should cost no more than 40k to set up turn key(refer to post #3).

RE markets aren't black and white, if you want to succeed you must know the specific market you are dealing with, where i am creating rental properties the market best favors rental income. 

for example, I own a property that cost me $45K, i put about a month and some money down to touch it up, and boom I have an asset that is providing me with $750 a month (and thats me being generous to my tenant) 
20% gross ROI, where I pay a property tax of ~$500 (and no insurance charges as i will not purchase it for this property)

lets just say I really wouldn't be the only one in my community to buy a couple places and never move back. 


Im currently funding for it to be built, once fully built the title will go under my name, income will be transferred via paypal, DD, cash, or i have the option to create a over seas bank account.

also i bought the condo as a preconstruction unit in 2017, for $89k USD, and because its further into being finished the pre construction price is now $199k USD so by the time its done and built, the asset will be worth more than $100k so i may have to claim it as an asset. 




Mortgage u/w said:


> You posted a question but do not want to acknowledge any answers. You already seem to have the secret to success - what else can this forum provide you?
> 
> Not sure what your "unconventional" strategy is to purchase rental properties mortgage free......unless you are borrowing from a private "buddy"? Even so, why forfeit the benefits of owning income generating properties using other people's money all the while offsetting your gains ??
> 
> ...


I also created this thread hoping to get other young high income earner to think of creative ways to maintain more of their wealth. Then again maybe someone on this forum lives in an area they can make a lucritive investment due to some due diligence in the community they want to develop or own pieces of. 


think of me not as just a landlord but also a contractor/developer/planner/entrepreneur

There is alot more work and expenses going on than simply buy the keys to a home and start charging rent. And because of the work and money needing to be put up (operational fees) I should be reimbursed. 

And this is just the beginning.


I am a very valued employee, imagine a 22 year old being wined an dined by a company hoping they will take a chance with them. Heck i didn't even have to make my own resume, a job recruiter did that for me. 

unless i got lucky, I must have some kind of value to offer. 

Good employees are hard to come across, glad my company made my stay as comfortable as possible(will def entertain the idea of staying casual), sadly for them i hold a bigger standard for my life than being employed by someone other than myself.


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## Mortgage u/w (Feb 6, 2014)

I always said "you make your own luck".

So since you started this thread to encourage others to post their creative ways, what's yours?


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## Mortgage u/w (Feb 6, 2014)

I remember your first thread now......you were the one who dumped money on some kind of timeshare in Nicaragua. Please also update us on how that investment is going.


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## Just a Guy (Mar 27, 2012)

Sounds like get a high paying job, find cheap properties, pay cash. It works, nothing magical.of course you need the high paying job, and you miss out on the real earnings and returns you can make in real estate, but it works still.


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## Eclectic12 (Oct 20, 2010)

baconbit said:


> the hassle and price of fees , debt and mortgages aren't worth it imo ...


Where the goal was to provide tax deductions, I don't follow why the hassle doesn't make it worth it ... but to each their own.



baconbit said:


> ... also i bought the condo as a preconstruction unit in 2017, for $89k USD, and because its further into being finished the pre construction price is now $199k USD so by the time its done and built, the asset will be worth more than $100k so i may have to claim it as an asset.


YMMV as the $89K USD original amount on it's own may have been enough to trigger the T1135 reporting. The 2017 BoC average currency conversion for US was $1.29 which would push the $89K USD to be something like $114k CAD. This would trigger the need to report based one one asset.

Even if the condo CAD cost was under the $100K - there are also things like funds in a foreign bank account, foreign shares in a taxable Canadian brokerage account or Canadian corp shares held in a foreign brokerage that have to be added into the total. 



Cheers


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## baconbit (Oct 18, 2017)

Mortgage u/w said:


> I remember your first thread now......you were the one who dumped money on some kind of timeshare in Nicaragua. Please also update us on how that investment is going.


its going great, flew out there last March. Very impressive team of entrepreneurs pushing Nicaragua to become a better country. You could say that the resort builders and the government have a mutually beneficial relationship. Once this resort villa is built, series of new development will occur in this beach town(lots of jobs to be created). I mean the government did subsidize for a very large power station to be built right next to the estate all these properties are being built, so I am confident there will be growth in the future. 

Emerald Coast is a very beautiful place, glad i own a property there(not a time share, that is cope my friend)


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## Mortgage u/w (Feb 6, 2014)

So basically you forked over $65k USD last year and property is still not built? 
It may not be a timeshare per say, but from your calculations, you only retain 25% of the income - the house keeps the rest and lets you assume all the risk. _Something _is being shared.

I still don't know what your unconventional investment strategy is where you involve no bank or lawyer and pay everything cash. I haven't seen you post any returns on your investments......except Nicaragua returning 0 so far, and a $50k property you are making $750 per month on....which you are looking for ways to use that as a means to reduce you taxable income (_I had to read that last part twice cause it looks wrong as I write it_)


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## nobleea (Oct 11, 2013)

baconbit said:


> I also created this thread hoping to get other young high income earner to think of creative ways to maintain more of their wealth. Then again maybe someone on this forum lives in an area they can make a lucritive investment due to some due diligence in the community they want to develop or own pieces of.


 with 22 years experience, that would put you in your early 40's. I'm 40 myself, all with a high income, but I certainly wouldn't call myself 'young'. If done right, retirement should be under 10 years away.

Eclectic12, as usual, has provided some great commentary on tax implications, overseas reporting, etc, but you seem to be ignoring all of it.

There's some crappy apartment condos that would sell <50K in Alberta, but they come with steep maintenance fees and bad reps. Lots of mobile homes available for <50K and they would probably rent for those kind of prices.

I guess you could avoid a lawyer to do the proper registering at land titles, I don't know what the requirements are in AB. Hardly seems worth it, with no mortgage what does a lawyer charge, $800?


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