All Forum Posts by: Sebastian P.

US vs Canada advice is very different for this topic. USA has 1031 tax deferred exchange, which effectively means you never need to recapture. Canada doesn't have this rule, so you have to pay back the money when you sell.

IMO in with a hyper inflationary forecast for the next 25 years, I think the erosion of inflation will become a great help to debtors.

Lets say if you sold your property and had claimed 400k over the years. You must now recapture the CCA you claimed.

This occurs as 400k added to your income tax filing for the year, which is taxed at your marginal rate. 

So 50% of 400k = 200k.

The present value of 200k 30 years in the future (with 5% inflation) is 46k in purchasing power.

PV = (1/(1.05^30))*200,000
= ~46k.

The time value of money eats away > 75% of your debt obligation is eroded.

The money you have to pay back can only buy 46k of goods.

Unless I'm completely misunderstanding things :)

Hi all,

Looking to connect with other Canadians investing in US - interested in picking your brains!

Thanks!

I'm looking at buying Long and Short term rental property in Florida, but I'm a Canadian/British citizen.

Does any one have any recommendations for quality cross border Tax and Legal people specializing in Canada/USA real estate investors?

I'd need a strategy for:
+ Liability mitigation
+ Best Tax approach

Thanks

If you are central/east USA, TD bank offers cross border banking, including mortgages. I know they offer Canadians mortgages in USA. I don't believe there is any tax on non residents buying in Alberta.

Alberta's pretty crappy for long term appreciation. I'm looking at USA for investing. 

12 doors - nice!

From what I can tell - tax is a large factor in the decision. Corporate tax on income from rentals is 50%. You get a tax credit back if you distribute the earnings as dividends. Which doesn't really help build wealth. Alternatively if you have more than 5 employees, the income is treated as active income and taxed a lot less.

Obviously a corporation acts as a liability defense. 

You have accounting costs every year with owning a corporation.

I'm a software professional that's been working for Billion dollar companies forever building great software.

I also love real estate and building software.

I'm looking for what gaps exist in software right now for real estate. What products/solutions are missing? I want to build something!

If anything is built, it would be yours to use at cost.

The only problem is - I don't know what's missing/where there's a need!

Thanks!

I'm actually waiting to hear back from TD regarding USA mortgage for Florida. They appear to be swamped with requests for the new lower mortgage rates. Happy to share knowledge as - when we get to it. 

Yea definitely a high cost of purchase. Its a pain making any numbers work :)

Thank you sir!

Hi all, I'm looking at entering the Short Term Rental Market in Kissimmee / Davenport. I'm just looking for any advice/recommendations/sanity check.

Is it a terrible idea to be looking at buying down there right now?
I assume occupancy numbers have dropped a lot due to Covid as MLS prices look to be dropping.

What else should I be wary of?
What other questions should I be asking?
Should I wait longer to see if prices drop further?

I'm based up in Canada so will likely have to make a corporation I assume.

Many thanks for any information!