# Unsure as to a Rental Business Structure



## w0nger (Mar 15, 2010)

I keep reading so much information that I'm not really sure where to go to start a rental. I will be turning my current primary residence (condo) into a rental soon and moving myself to a new home. So I'm quite confused with the amount of information that is out there. What's the best move?

From what I'm reading now, i have it in my head that I'm going to be renting my property out under a Sole Proprietorship that I will be running out of my new home. I would form one Umbrella Sole Proprietorship (blah blah blah company), to be run out of a bedroom (so I can claim that room as a business area), within it a sole proprietorship (blah's properties company) would own and rent the condo, and then another Sole Proprietorship (blah's services company) that would do all the management/maintenance of the rental property. This would allow more tax claims? I'm not sure and I'm confused. What's the benefit in doing this? Is it even correct?

help...


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## stardancer (Apr 26, 2009)

No, you won't be running a sole proprietorship. You will be reporting the rental income on a T776. See...

http://www.cra-arc.gc.ca/ebci/cjcm/srch/bscSrch?lang=en&bscSrch=rental+income&cn-search-submit= Go 

You will be able to claim certain expenses against the rental income, but NOT home office expenses. You would still be the owner of the rental property as an individual. You can claim vehicle expenses only under very specific circumstances.

If you were in the business of renting properties, having a number of them or a commercial property, then you would be a sole proprietorship or company. However, in this case you are an individual with an extra property.

Make sure you get a valid quote on how much the property is worth at the time that you change its use. When you do come to sell, you will be subject to capital gains- proceeds less the cost base less the selling costs. See...

http://www.cra-arc.gc.ca/tx/ndvdls/...rprtng-ncm/lns101-170/127/rsdnc/menu-eng.html

Also read up on the landlord-tenant act and search the net for rental information. There are all kinds of headaches involved.
http://landlordrescue.ca/


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## Just a Guy (Mar 27, 2012)

You should also look into the write offs you can claim, there are less allowed if you own less than 3 properties. Like you can't claim mileage to travel to the property.


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## w0nger (Mar 15, 2010)

ah i c... so there's no point in creating a "business". Thanks. Here I was thinking I had to register a sole proprietorship and do all that jazz... thanks.


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## Berubeland (Sep 6, 2009)

Well actually please do treat it like a business.  

Be the best landlord/person you can be. I'll give you five tips...

1 - One ounce of screening is worth a pound of paralegal if you get a bad tenant. 
2 - The only way to make some money in this business is to rent to good tenants. Yeah you can up your cash flow by renting to weird people on social services but you'll regret it a thousand times. 
3 - Get decent pictures of your place and use them in online ads. 
4 - If you need forms go to my website where I give them away for free, you have to "give" me your email but feel free to unsubscribe after you download everything 
5 - Presentation of your rental property is everything. Do whatever you need to to make it nice and livable. Before renting ask yourself "Who would live here?" if the answer is "crackhead" or "dirty crackhead", you're probably right. 

Finally credit checks are available here on this site, I get a deposit and full application before I do credit checks. http://www.tenantverification.com/ it take a few hours to get set up but there's no membership fee. 

Best of luck to you!


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## w0nger (Mar 15, 2010)

awesome, thanks!


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