Wit Ventures: Managing Income Property A Challenge. Landlord Tips.

Sunday 13 May 2018

Managing Income Property A Challenge. Landlord Tips.

Owning an income property or two is both a great way to make money and a real financial challenge.

It’s been an excellent source of income for people over the last decade or so, as real estate prices in Canada have soared. But making money from property is a lot of work, an ongoing expense and requires some financial know-how to, in the end, make it make sense.

Landlord Prep for Income Tax Season

Since it costs money to operate a rental property, being a landlord comes with numerous tax deductions, which you can use to offset your rental income.

In general, it’s a good idea to keep all your receipts and use an accountant to help you determine which are legitimate and whether to consider an expense a current expense (like paint or a new door lock) or a capital expense (a new furnace).

When you file your taxes, you have to fill out a special form: a T776 Statement of Real Estate Rentals. As well, if you are buying a new house or condo in order to rent it out, you might be eligible for an HST or PST rebate. In short, the tax side of being a landlord is complex. While you can find some information from Revenue Canada here you truly do need a tax professional helping you to make sure you fill things out property and get all the refunds and deductions possible.

Landlords Need to Know the Law

Every province has an act that governs relations between tenants and landlords — get to know the rules where you live to avoid conflict and, in extreme cases, court. These laws spell out the limits on how much rent you can charge, how much notice you have to give before raising rent, rules about security deposits and eviction rules and limitations. Here’s a quick list of the different provincial rules from the Canadian Mortgage and Housing Corporation.

As well, have a look at the Canadian Human Rights Code. This says a landlord cannot discriminate against a potential tenant based on race, sexual orientation and even being on social assistance. This means you must be cautious during the interview process and not ask personal questions about religion, plans to have more children and the like.

Going against these rules can land you in court or, at the very least, disrupt your relationship with your tenants.

Link to the rest here.

Image. Google Street View.

Thank you for reading.

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Shirley D. Neal

Shirley has over 30 years of experience in such diverse businesses as financial planning, manufacturing, and supply. Her education includes a B.A., B.ED., M.ED., C.F.P., N.L.P. and the home inspector’s course as well as having her AZ license for five years. Her family home has given her and her husband the opportunity to do extensive renovation and repairs thereby increasing the value about $100,000 in ten years. She has been able to see firsthand how much a sensible and cost efficient renovations can add to the value of a home. Shirley has chosen joint ventures because she thinks that her experiences an help others achieve their goals and maximize the profits for both parties. In 1979, Shirley became involved in a small group of women who started a metal manufacturing company making small deep drawn metal parts for the automobile companies in Windsor. They took the company from start up to over $400,000 in sales in five years. That was a lot of parts since the parts sold for only five cents per each. In 1985 they sold the company to one of their customers. Whether it was selling mutual funds, teaching foster parents how to recruit foster parents, or working for Tony Robbins, Shirley has put more than 100 percent into every endeavour she was involved in.