A: IMO, flips (including properties for lease option) should absolutely be in a corporation. Active income is taxed at around 14% in a corporation, and flips are active income.

Regular rentals can go either way, and - as they say - it is a very personal decision depending on your current financial situation and your plans for future expansion.

If you plan to build a large portfolio:

  • Using a corporation allows for more effective tax and estate planning.
  • As mentioned, active income is taxed at 14%, which could represent a huge tax savings.
  • If you are in a high personal tax bracket, you may still save taxes on passive rental income within a corporation.
  • These savings can be reinvested into other properties, possibly allowing you to build your portfolio more quickly.
  • Yes, you are taxed corporately and then again personally if and when you take a salary or dividend from your corporation, but you can choose when to do that.  If you buy property in your personal name, you must personally declare the income when it is earned, possibly pushing you into a higher tax bracket.
  • Some people find they have difficulty qualifying for mortgages for their corporations.  The key is to deal directly with specialists who know how to work with corporate mortgages.  Some mortgage brokers may be able to help, but with some financial institutions one must work directly with a bank’s mortgage specialist (possibly in the commercial division).

If you plan to stay small, then rentals in personal name should be fine tax-wise.

Received the best compliment EVER from a Rent to Own client who successfully purchased his property this week:

Good Morning Sherilynn,

I hope things are well. Now that our transaction is complete, Tammy and I are interested in investing with QDHomeQuest. We were obviously very pleased with our experience, and would like to be on the other side if possible. I was just wondering if we would be able to invest, and if so, how much would money would we need to start.

Cheers, Roger

This beautiful, adults-only duplex in Spruce Grove will soon be listed for sale.  Here's a sneak peak.

.be">Beautiful Spruce Grove Duplex

According to the Edmonton Journal, resale home prices in Edmonton will soften and sales will slide further in 2016 — but not as much as other places in Alberta battered by a faltering economy, says a forecast by the Realtors Association of Edmonton.

“Edmonton and area has not felt the same effects of oil prices as the rest of Alberta has,” Steve Sedgwick, chair of the group, which represents 3,300 real estate agents in the Edmonton area, said Wednesday. “There’s a lot of exciting growth happening in Edmonton and we remain conservatively optimistic when it comes to our housing market.”

Read the full article here: Edmonton Journal Real Estate Forecast

milsom sherilynn ab north michael millenaar 20151130Honoured to have been named the Real Estate Investment Network's "JV Partner of the Year."

"The Joint Venture Partner of the Year is given to the Member who has developed new and dynamic ways of attracting the most profitable JV partnerships with other investors and creates win/win situations for both partners."

Read the full article here: REIN blog - JV Partner of the Year



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