# Purchasing rental property



## Bugz (Oct 25, 2010)

I'm looking to purchase a rental property ( or a couple) Just wondering if there are big advantages/disadvantages to purchasing the property under my name versus a business name?


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## kcowan (Jul 1, 2010)

If you are taking a mortgage, then putting it in your name will make it easier, unless the business has a track record.


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## GeniusBoy27 (Jun 11, 2010)

I think I've written about this before.

Even with a business mortgage, it's going to have to be personally guaranteed, unless you have enough capital from the business side of things.

In general, business has higher loan rates, and more reporting difficulties. However, the benefits are lower tax on profits, ability to defer, and a reduction in legal liability. Also, it's easier to structure further purchases off a business (in general).


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## davext (Apr 11, 2010)

How much is "enough" capital for a business mortgage?


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## GeniusBoy27 (Jun 11, 2010)

Typically 35%.


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## Ihatetaxes (May 5, 2010)

My business just qualified for a mortgage as we want to buy a building rather than leasing for the next 20 years. We have a very profitable business and three years of solid growth. They still want to see 30% down which is fine as we have been saving for this purpose.

The thing that I find incredible is the price of commercial real estate. A crappy old house converted to offices with commercial zoning is worth close to double what it would be if just zoned residential.


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## the-royal-mail (Dec 11, 2009)

Ihatetaxes said:


> The thing that I find incredible is the price of commercial real estate.


Agreed. I was looking into this earlier this year, to find some indoor parking with lights, heat and water for several large commercial vehicles. Big bucks. City life and work is too expensive.


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## GeniusBoy27 (Jun 11, 2010)

Really? I find that commercial property values are actually lower, due to higher commercial taxes for the same property. i.e. in our work, live, loft, the commercial property values are 20% less than a similar size property that is deemed to be residential.


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## Berubeland (Sep 6, 2009)

I also agree with Genius boy 

Commercial space, industrial space and mixed use commercial buildings are cheaper compared to houses in the area. 

Interest rates are higher. Taxes are higher. Once you get past the million $ mark (not all the time sometimes lower) prices become linked to income.


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