Yes, you can deduct mortgage interest as well as property tax and maintenance from your investment property in Canada . If you own multiple units and you are the one managing them you should also open a property management company and charge your properties a management fee which is also tax deductible.

If you have enough equity in your home you can get a second mortgage or a line of credit to purchase your investment property . You can also refinance your mortgage to pull equity out from your home in order to invest.

Powered by

My wife and i are buying a house. my parents in law want to invest in this house too, so are putting $100k into it (cash). we will get the balance via a mortgage and will live in the house paying all living expenses. parents in law are doing this purely as an investment, meaning that when we sell in a few years they want to extract their profit relative to how much of the property they own. we want to make sure we can take advantage of mortgage interest tax deductions, homestead exemption etc. they want to make sure they don't have to pay tax on any profit they make. how do we do this? do they 'gift' us the money, then after we close do a quitclaim deed? if we do that, when we sell the house can we split the proceeds any way we want? or do we do this as an 'on-demand' loan from them? or do we do this as a joint investment and close together? it seems more complicated than it needs to be.

This is not as complicated as it seems. Your in-laws do not have to pay the taxes to profit off the house. Your mortgage company will profit and they are not paying taxes. You need to have your in-laws go on the property as a second lien holder. You will have to work out any and all the details as to how the proceeds will be divided and what percentage they will get. You should also include the number of years this is to go. This second should be recorded by a title company that this lien is only to be in effect if there is a sale of the property. You may have to wait until the 1st loan close before adding this second as there might be a clause in the first loan docs that would prevent it being recorded at the same time as the first. This is a common practice so don't get excited. Now if you refinance the property and they have not been paid off, they will have to go to escrow and subordinate to a new first or forgive the loan if the loan-to-value does not work out. When the refinance is complete then they go right back on as a second mortgage. Once the property is sold their lien would be paid off as specified by the agreement and addedum recorded by the title company. The escrow would cut seperate checks one for each lien holder that is on title, of which they would be one, as well as one for you the home owners of the proceeds left over. You might want to check with an attorney as to the correct wording of the lien your in-laws would hold as I am not an attorney. I hope this has been of some use to you, good luck. "FIGHT ON"

Powered by

I've had people tell me that you should always keep a mortgage because of the tax deduction. is that really true? we paid our house off 2 years ago and it feels great to not have a payment, but i'm wondering if it would be a good idea to mortgage our house and use the cash to buy some investment property.

CONGRATULATIONS ON PAYING OFF YOUR MORTGAGE - Now - kick me ok - I am a Mortgage Broker, but in this case - Don't re-mortgage your home - ok. The reasoning is this. 1. IT is PAID for. 2. Figure up what your payment would be. Decide if it is worth getting the tax break,vs the payment. 3. If you wanted to have a payment - why NOT pay yourself - the money - put it into a seperate account, let it build interest - and in 12 months - see how much you have..... 4. If something happened to you or to your spouse, could you / would you what to have a mortgage to pay off. 5. Are you retired. If not, retirement may not pay for all you need, so having a mortgage payment would hurt you more than help you. 6. What you could do, is not touch the house. But get 100 percent financing on the investment property, that way your home will all ways be free and clear. Let your investmant pay for itself.....You could write off the interest, the repairs, etc at year end (talk with a tax accountant that deals in investment property) for a true picture of what you can take off. What ever you do - use a Broker - ok Unless you have terrific credit and can get 100 percent at your local bank. Talk with a broker, a broker underwrites for many company's (I underwrite for 150 companies) so I only have to pull credit 1 time, and they look at my credit. A single lender (not a broker) has programs available, but they may not be able to help you and your situation, so you go elsewhere, and than that person pulls your credit (see what I mean.) If you shop, your credit is pulled and that is considered a soft pull, for a 30 day period. Just like shopping for a auto, it is good for 30 days. If you apply for a credit card, that is considered a "hard" pull and it drags down your credit score. When looking for a home, please do not apply for a credit card, Department Charge Card, Gasoline Card or make any major purchases, like a auto, etc. This will pull your credit down. Good Luck to you both.

Powered by

I am interested in buying residential income properties in the nashivelle tn area. i am from california so the properties would have to be managed out of state. i found one i like duplex, cap rates good, has stable tenants and relative well priced. realtor in the area even showed me pictures of the property. is this a good investment for cash flow, apprecation as well as good tax deduction. it is not a section 8 property but its more in up and coming area. thanks

The "up and coming area" part could be a good marketing agents way of saying "it can only get better from here". I would never buy sight unseen. You cant see what is down the street from a picture of a house. I'd rather have the worst house in the best neighborhood than the best in the worst neighborhood. I personally am not comfortable buying something to be mananged by someone else that is far away. All of my properties are within a 2hr drive of my home. But I have considered it, just not ready for the issues I know it will bring. In essence your finances are at their service, good or bad. As far as appreciation alone making you rich... Consider: Noone has a crystal ball are you a holder or a flipper? If you buy a place that costs you $100 a month to hold until it appreciates....How many can you afford to buy? If you buy a place that yeilds $100 in positive cash flow a month, now how many can you buy? Some props are for holding and bringing in residual income while appreciating. Some props are for cash flow income only and wont appreciate. Some props are for buying beyond below market, fixing and flipping. There is not set formula. It depends on your abilities, the house in question etc..... If I only bought for appreciation there are areas in this country that just dont appreciate yet rents still go up.

Powered by

The web is full of articles on buy-vs-rent or "pay down the mortgage" vs. invest, but most authors seem very confused by the large number of variables. and almost no one talks about the benefits of not paying rent. if i bought a $100k property with cash and if living there saved me $12k in rent per year, wouldn't that be equivalent to a 12% return on investment (modified of course by all the other variables like interest deductions i'd get if i financed; property tax and maintenance costs; the fact that rent is paid post income tax, etc.) if i'm in the middle of paying off my home, does my equity pay me back in the same way? or is the saved-rent benefit irrelevant till the day my payments end? does anyone know where to find a complete list of all of the variables involved (and maybe a calculator?) does anyone know where i can find something written on this subject by a qualified economist/mathematician?

the value of money invested in own home; is the rent saved equivalent to a dividend. and the increase in the value of own home,is the bonus got on the value of money invested.

Powered by

Carlo company bought real estate, on which there was an old office building, for $900,000. they paid $90,000 in cash as a down payment and signed a 6% mortgage for the remainder. they immediately had the old building razed at a net cost of $30,000, the salvaged materials were sold for $4,200. attorneys were paid $7,000 in connection with the land purchase and an additional $3,000 in connection with permits and zoning variances necessary for carlo's new office building. $25,000 was paid for excavation for the basement of the new building. $2,100,000 was paid for construction of the new building, and $95,000 was paid for a parking lot and necessary walkways and driveways. ____1.the new office building should be recorded at a.$2,100,000. b.$2,128,000. c.$2,125,000. d.$2,100,000. ____2.land should be recorded at a cost of a.$932,800. b.$937,000. c.$935.800. d.$960,800. ____3.martin textile purchased machinery for $50,000 eight years ago. it was expected to have a useful life of ten years, no salvage value, and was depreciated using the straight-line method. at the end of its eighth year of use it was retired from service and given to a junk dealer. the entry to record the retirement includes a a.debit to loss on disposal for $10,000. b.debit to machinery for $50,000. c.debit to depreciation expense for $10,000. d.credit to accumulated depreciation—machinery for $40,000. ____ 4.which of the following should not be included in the plant assets (property, plant, and equipment) classification? a.land on which warehouse sits b.building housing corporate headquarters c.parking lot used by visitors d.land held for investment. ____5.salvage value is deducted for the initial computation of depreciation expense in all of the following methods with the exception of a.straight-line. b.units-of-activity. c.declining-balance. d.all of the above include a deduction of salvage value. ____6.the cost of a patent should be amortized over a.40 years. b.the shorter of its legal life or its useful life. c.the longer of its legal life or its useful life. d.its useful life. ____7.on july 1, 2007, low enterprises sold equipment with an original cost of $85,000 for $40,000. the equipment was purchased january 1, 2006, and was depreciated using the straight-line method assuming a five year useful life and $5,000 salvage value. the necessary entries for 2007 include a a.debit to accumulated depreciation—equipment for $16,000. b.credit to gain on sale of equipment for $21,000. c.credit to cash for $40,000. d.debit to depreciation expense for $8,000. ____8.which of the following is not an intangible asset? a.research and development costs b.copyrights c.organization costs d.goodwill ____ 9.westot’s retail store regularly makes payments to a state government for the sales taxes resulting from its sales to customers. these sales taxes a.should appear on westot’s income statement as an expense. b.are based upon a company’s gross profit in most states. c.are long-term liabilities when they have been paid. d.are collected by westot’s as an agent for the state’s taxing authority. ____10.fast corporation borrowed $150,000 on march 1, 2007, signing a one-year, 7% note payable to city bank. the adjusting entry required on december 31, 2007, includes a a.debit to interest expense of $10,500. b.debit to cash of $180,000. c.credit to interest payable of $8,750. d.credit to interest revenue of $8,750. ____11.stome corp. issued $300,000 of 5%, 5-year bonds at 102 on january 1, 2006. the straight-line method of amortization is used and the bonds pay interest annually on january 1. the amount of bond interest expense that stome should report on its 2006 income statement is a.$16,200. b.$13,800. c.$15,000. d.$14,400. ____12.front corporation issues its bonds at a discount. amortization of the discount will a.decrease bond interest expense. b.increase bond interest expense. c.decrease the carrying value of the bonds on the balance sheet. d.be reported as a loss on the income statement. ____13. failure to record a liability will probably a.result in a overstated net income. b.result in overstated total liabilities and owner’s equity. c.have no effect on net income. d.result in overstated total assets. ____14. on the balance sheet the current portion of long-term debt should a.be paid immediately. b.be reclassified as a current liability. c.be classified as a long-term liability. d.not be separated from the long-term portion of debt. ____15. gunder company does not ring up sales taxes separately on the cash register. total receipts for october amounted to $18,900. if the sales tax rate is 5%, what amount must be remitted to the state for october's sales taxes? a.$900 b.$945 c.$45 d.it cannot be determined. ____16. bonds that are subject to retirement at a stated dollar amount prior to maturity at the option of the issuer are called a.options. b.early retirement bonds. c.callable bonds. d.debentures. ____17. the muffin company issued a five-year interest-bearing note payable for $50,000 on january 1, 2005. each january the company is required to pay $10,000 on the note. how will this note be reported on the december 31, 2006, balance sheet? a.long-term debt, $50,000 b.long-term debt, $40,000 c.long-term debt, $30,000; long-term debt due within one year, $10,000 d.long-term debt of $40,000; long-term debt due within one year, $10,000

Ask for one answer - fine, no problem Ask for two answers - Well OK Ask for three answers - Hmmm Ask for four answers - Am I doing your homework now? Ask for seventeen answers - Priceless

Powered by

Instructions designate the best answer for each of the following questions. use the following data for questions 1 and 2 below: carlo company bought real estate, on which there was an old office building, for $900,000. they paid $90,000 in cash as a down payment and signed a 6% mortgage for the remainder. they immediately had the old building razed at a net cost of $30,000, the salvaged materials were sold for $4,200. attorneys were paid $7,000 in connection with the land purchase and an additional $3,000 in connection with permits and zoning variances necessary for carlo's new office building. $25,000 was paid for excavation for the basement of the new building. $2,100,000 was paid for construction of the new building, and $95,000 was paid for a parking lot and necessary walkways and driveways. _____3.martin textile purchased machinery for $50,000 eight years ago. it was expected to have a useful life of ten years, no salvage value, and was depreciated using the straight-line method. at the end of its eighth year of use it was retired from service and given to a junk dealer. the entry to record the retirement includes a a.debit to loss on disposal for $10,000. b.debit to machinery for $50,000. c.debit to depreciation expense for $10,000. d.credit to accumulated depreciation—machinery for $40,000. _____ 4.which of the following should not be included in the plant assets (property, plant, and equipment) classification? a.land on which warehouse sits b.building housing corporate headquarters c.parking lot used by visitors d.land held for investment. _____5.salvage value is deducted for the initial computation of depreciation expense in all of the following methods with the exception of a.straight-line. b.units-of-activity. c.declining-balance. d.all of the above include a deduction of salvage value. _____6.the cost of a patent should be amortized over a.40 years. b.the shorter of its legal life or its useful life. c.the longer of its legal life or its useful life. d.its useful life. ____8.which of the following is not an intangible asset? a.research and development costs b.copyrights c.organization costs d.goodwill _____11.stome corp. issued $300,000 of 5%, 5-year bonds at 102 on january 1, 2006. the straight-line method of amortization is used and the bonds pay interest annually on january 1. the amount of bond interest expense that stome should report on its 2006 income statement is a.$16,200. b.$13,800. c.$15,000. d.$14,400. ____12.front corporation issues its bonds at a discount. amortization of the discount will a.decrease bond interest expense. b.increase bond interest expense. c.decrease the carrying value of the bonds on the balance sheet. d.be reported as a loss on the income statement. ____13. failure to record a liability will probably a.result in a overstated net income. b.result in overstated total liabilities and owner’s equity. c.have no effect on net income. d.result in overstated total assets. ____15. gunder company does not ring up sales taxes separately on the cash register. total receipts for october amounted to $18,900. if the sales tax rate is 5%, what amount must be remitted to the state for october's sales taxes? a.$900 b.$945 c.$45 d.it cannot be determined. ____17. the muffin company issued a five-year interest-bearing note payable for $50,000 on january 1, 2005. each january the company is required to pay $10,000 on the note. how will this note be reported on the december 31, 2006, balance sheet? a.long-term debt, $50,000 b.long-term debt, $40,000 c.long-term debt, $30,000; long-term debt due within one year, $10,000 d.long-term debt of $40,000; long-term debt due within one year, $10,000

$199980