# mortgage and tax for a second condo



## frugalmini (Feb 19, 2011)

Hello, I have a question here, and I'd like to hear your opinions on this:

I have a condo that I'm living there right now, and I'm going to purchase another one to 
1. rent out 
2, for my parents to stay when they go visit me in the summer. 

My mortgage broker told me that I have two choices with the mortgage: 
1, apply as a regular mortgage becuase my parents will stay there when they visit me. 
2, apply as a rental property mortgage, which will cost me 2% more in interest and more document to provide the bank to get approved.

Tax wise, my understanding is the interest for rental property mortgage is deductable. But I'm not sure if I get the type 1 mortgage, can I still have the interest deducted just for the time when I rent it out? Also is there a time requirement for how many months can I rent it out in a year?

Thank you!


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## andrewf (Mar 1, 2010)

You should read the contract carefully. If you rent out a property that you claimed to be for your personal use, you might be committing fraud.


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## frugalmini (Feb 19, 2011)

Thank you, Andrew. That's why I'm asking. I want to make it right. 
Becuase it is partly for my parents, and I don't want just leave it empty for the rest of the year while paying condo fees and mortgage on it.


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## andrewf (Mar 1, 2010)

How would you rent it? Most tenants would want on-going rental arrangements, which would preclude your parents using it when they stay there.


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## frugalmini (Feb 19, 2011)

it's a condo by university, I rent to student during the school terms, it's easy to rent out for 4 months term.


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## andrewf (Mar 1, 2010)

What about renting a sublet for your parents when they come to visit? Unless you really want to be a landlord... I would caution against being overexposed to real estate.


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## frugalmini (Feb 19, 2011)

I see you point here, thank you Andrew,


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## Just a Guy (Mar 27, 2012)

I've never had a mortgage cost more because it's a rental. Seems like you should talk to a different broker.

Also, you seem to assume being a landlord is easy, I assure you it's work, especially with university students. 

Also, I'd also second the warning on real estate as an investment. Canada is overpriced for the most part.


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## Berubeland (Sep 6, 2009)

You may want to check your rental laws as well. Here in Ontario it's really difficult to get tenants to move and if you take them to court, forget about being on time for momsy's visit. 

Of course Alberta has different rules.


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## icon-ninja (Feb 5, 2013)

if you want to be a landlord its a lot of work. Something i did not expect on my end. I recently got a rental property and thought it is a good idea besides sitting in my bank account.

Just be prepare to do work and plan 3 to 4 steps a head and do a lot of research


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