# Setting up a company to buy, sell and rent properties



## Montrealer (Sep 13, 2010)

I am about to set up a company to buy, sell and rent properties. Has anyone done this? If so, share your experiences, tips and tricks please.


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## Quotealex (Aug 1, 2010)

Are you planing on having more than five employees working full time in that company?


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## Montrealer (Sep 13, 2010)

No I don't, why?


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## Homerhomer (Oct 18, 2010)

Montrealer said:


> No I don't, why?


Rental income is inactive, hence you don't get small business deduction, unless you have 5 employees.
You are aware that the income from selling and buying properties may not be treated as capital gains, but it will be treated as income?


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## crazyjackcsa (Aug 8, 2010)

Montrealer said:


> No I don't, why?


And with that, Stop. You aren't at a point where you can even consider it.


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## Montrealer (Sep 13, 2010)

This does not make sense to me because I know people that have setup numbered companies to buy, sell and flip properties and they are a one man show or two people max!


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## Homerhomer (Oct 18, 2010)

Montrealer said:


> This does not make sense to me because I know people that have setup numbered companies to buy, sell and flip properties and they are a one man show or two people max!


Did anyone here say you can't do it if you have less than 5 poeple working for you?

Either way glad we could help.
You are welcome.


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## Quotealex (Aug 1, 2010)

Montrealer said:


> I know people that have setup numbered companies...


If he/she has kids and a wife/husband that hardly makes any money, then maybe it was good (not a great) a way for him/her to go since a corporation allow him/her to split the income among his/her family. 

Other than that, I dont see a good reason to chose to set up a company if you are going at it alone and have no plan on employing 5 employees and more. A real estate company is considered a passive income and therefore you will be tax at 48% in Québec, the accounting fees will run you about $1,000 per year, banks will not give a mortgage to the company unless you personally guarantee the loan, and on and on....


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