All Forum Posts by: John Humphries

Hey David, good luck with the rental.  My advice would be to make sure it is comparable with the rest of the properties in the neighborhood (inside and out), while keeping everything as simple as possible. Don't go too crazy with renos or add ons as well.  If you have been happy living there, most likely your potential renters will as well.  While it's tempting to fix a rental up with all sorts of bells and whistles, I've found that the more moving parts there are in your rental, the more phone calls and maintenance that you are going to have to endure. As an example, baseboard heaters are pretty much the norm here where I invest. People do have HVAC units and gas fireplaces and heat pumps are pretty awesome, but as a landlord, I'm happy to stick to baseboard heat for rentals.  It's so much easier to manage.  Less moving parts.

Also, in order to attract great tenants that aura of newness in a home can make all the difference. Fresh paint, new outlet covers, and replacing any older appliances (which saves headaches down the road) is huge. But again, the simpler, the better!

Looking for someone out there with some Canadian tax experience.  My wife and I purchased our first rental property in 2016 and are wondering who should claim it on their taxes (Everyone files individually in Canada, right?). I have a regular T4 job and usually get money back each year after doing my taxes.  Also have a Capital loss from years ago that I keep carrying over as I have had no investment income profits to use it against in the last few years.  My wife is basically a self-employed consultant with one client who pays her a salary each year.  They do not take out any taxes so she is responsible for that and usually has a big tax bill as a result. Our property cash flows about $300 per month after p&i, insurance, and property tax, but we'll show a loss on it with other expenses factored in as we probably spent a bit more when you factor in some of the light renos that we did after we bought it. First time claiming a rental property on taxes so I'll be getting a crash course on depreciation as well.  Since I'm thinking that the rental property will actually be a bit of write off, shouldn't my wife claim it on her taxes? Does it matter?  Can anyone weigh in on this?  Thanks!

@Steven Hamilton II, sorry for the late response.  Just picked up a big contract and work and have not had much time to come up for air.  I've definitely been filing all returns in the US and the FBAR each year since I moved to Canada.  It's all been relatively simple so far, but if I end up buying real estate in the US this year or next, I'll definitely be looking for some help there.  I've got a few more questions about how a deal like this would work tax-wise for myself and a potential partner, so I'll definitely be in touch before making any decisions.  Thanks again.

@Steven Hamilton II thanks for the response. I doubt I'll bother with an LLC at this point. My plan was to have it in my name. One possible wrinkle would be in getting the mortgage. I had some trouble with getting a mortgage in my name or with getting a competitive rate when I looked into this a few years ago. If I have a family member, who is a US citizen/resident making US dollars, get the mortgage in their name, how would that affect taxation? I would like to be a co-signer on the loan, in which case would I be able to put all of the profit on my return as well as write off all expenses? Alternatively, if I am not able to get my name on the loan and it is solely in someone else's name, would they have to claim on their taxes even though they are basically just a figurehead? Thanks again!

I'm looking for someone knowledgeable to bounce some tax questions off of regarding purchasing real estate in the US as a non-resident.  Currently, I'm a US citizen, Canadian permanent resident.  I live and work in Canada but still have some money in US accounts back home in NC.  I've been considering some turnkey investments in various states and am curious if this is going to create tax headaches down the road if I follow through.  Currently, I have no US income and my Canadian income has always been below the threshold that would require me to pay US taxes.  I do my US federal return each year along with my Canadian, but have not done a State return since I stopped having US income.  If I were to purchase an investment property, I'm assuming that I would start paying State income taxes in whichever state that I buy as well as having to claim that income on my US return (and my Canadian return).  With only one or two investment properties, and assuming no change in my Canadian income situation, I would think that I would still get the foreign income exclusion in the US but am curious if the State income taxes would take a big bite out of any potential profits.  I know this is a bit of tough question with lots of moving parts, so if anyone has any experience with this type of situation, I'm open to referrals or advice!  Thanks in advance.

Thanks for the replies everyone.

@Matt Geerts I'd love to start a turnkey business myself but don't really have enough rehab experience in my toolbox yet to feel comfortable doing it at this moment.  Also, the area that I live in is a bit trickier as home prices are fairly high compared to rental rates.  That's the main reason that I am looking into turnkey.  I own a property here that cashflows but I have seen much better deals in many of the US markets that would require much less money down and would provide even more cash flow.  I understand all of the pitfalls and potential problems that you can run into by buying turnkey, but I think it could be a great way to diversify my real estate portfolio and give me more monthly income. As far as my interest in Canada, just trying to keep my taxes simplified. I'm US citizen, Canadian PR and so already have to do taxes for both countries. I still have US investments that may go towards turnkey in the US, but I was just hoping to see some similar opportunities elsewhere in Canada.

@Ming Lim I'm curious about the agent doing BRRR in the GTA. Are they buying, rehabbing, renting and then selling? I did that with one property when I lived in Toronto years ago. It was quite profitable, but I think the GTA might be well outside my price range these days!

@Linda Labbe What are house prices/rental rates like in Thunder Bay these days?

Thanks again everyone!

Does anyone have any experience with turnkey companies in Canada?  I've seen quite a bit out there on companies and people doing this in the US, but am having some difficulties finding quality Canadian content.  Can anyone recommend any websites or companies that are providing this type of service in Canada?

@Tyler Cruz thanks for the tip.  I'll look into that one and see if I can make it out sometime.

Hello fellow Vancouver Islanders.  I'm wondering if there are any other potential real estate investors in the Comox Valley or any surrounding areas (Nanaimo or Campbell River) who might know of any real estate clubs or meet ups? I'm trying to get more active in real estate investing locally and hoping to meet some fellow investors and learn from other people's experience.  Anyone have any advice on where to look?

Hi Adam, I'm a bit new to the landlord game myself, but I have managed a duplex in Toronto years ago and am 3 months into my first rental property in Courtenay, BC now.  For the property here in BC that I just bought, I posted on Craigslist as that is where most renters in this community turn for properties.  We have a tight rental market here so I had around 20 responses within the first 2 days of posting. Next step was to email each response with a copy of my tenancy application (pulled directly from the BC Tenancy Act website).  This weeded out many of the potential problem candidates as some did not bother to fill out the paperwork to move forward.  The application asked for basic info such as references, reason for moving, current employment with salary, etc... For applicants who returned applications, first I looked at salary and was able to weed out several more as they did not have enough monthly income to be able to pay rent over the long term.  There is a good % of income rule of thumb that perhaps someone can comment on here.  It is currently escaping me. Next, I pulled up Facebook and looked up everyone who was still standing.  Most had Facebook pages and I was able to weed out a few more based on what I saw there.  Amazing what people will put on the internet voluntarily these days!  All of this led us to a small handful of potential candidates, before even checking reference or credit.  I spoke to each personally at this point, inviting our best candidates for coffee one morning.  Upon meeting them, it was obvious that they were going to be our new tenants.  Retired couple wanting to move to a single story home, closer to their church (which was in the neighborhood), and closer to their grandkids who live just down the street.  They plan to live there for the rest of their lives and we are stoked to have them as tenants.  Hope that helps!