Why residential landlord is the best way to get screwed and nothing you can do about it I would say never and buy a reit.
Sent from the future
Sent from the future
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COVID and the housing market
- Thread starter mimico_polak
- Start date
Doesn’t seem like many investments return those type of dividends in the long term or capital gains. Especially considering the leveraging accessibility to it.
REITs, or any other investments you’re limited by available cash.
Mind you I wouldn’t HELOC on stocks or ETFs. Maybe my risk averse mentality is what’s screwing me.
Can you afford 2 years of mortgage and no rent if the tenant decides not to pay? Plus the repairs to damage the non paying tenant will do.
Sent from the future
Nope. Can’t do that.
Guess I was fortunate for a decade with never having a bad / non-paying tenant.
Unlike my cousins where it took 6 months…
ifiddles
Well-known member
and that's why I never got into rentals...too much of a risk, especially when I was single...not worth the hassle in my eyes...too many rights for tenants and not enough safeguards for landlords...and yes, I know there are good tenants and bad landlords, but I'm talking about honest landlords who really are in it for the long haul...
hubby's house in Cambridge is rented and we have excellent tenants...they're paying way under current market rate, but keep the place neat, clean and are willing to do minor repairs without us having to go out there all the time...thinking of selling next year, but capital gains is going to be a pain (so many changes to ownership over the years and no real good paper trail tracking it
)...anyone know a good accountant? 
Not housing but a clear picture of a cash crunch. Guy has a 2019 Lexus and owes 42k on it. Gets a flat and can't afford to fix it. Takes out a dodgy loan to pay for repair and misses payments on that loan. Lexus repossessed. Repair loan wants more than double original amount to clear. Guy wants his car back. Guy needs an old civic not a new Lexus.
www.cp24.com
Ontario man on the hook for almost $7,000 after car repossessed for missing loan payments
An Ontario man said he was shocked when his car went missing and later learned it was repossessed after he missed auto loan fees that have mounted to almost $7,000.
www.cp24.com
42k on a 2019 Lexus , it gets repo’d when he heads out to the gym. Has a flat and takes out a zippy loan that is $2800 . For a flat? Then escalates to 8k because of super compounding interst . Sorry this guys an idiot .
Are there are 10,000 just like him.
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Are there are 10,000 just like him.
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Here's a bright spark that hasn't fully considered her situation. She owns a condo in Toronto but moved hours away. Tells the city that she wants to rent out the second bedroom of her owner occupied primary residence in compliance with the STR by-law and gets approved. Through paperwork errors (address did not match exactly due to st/street) Toronto pulls the airbnb listing. She goes to the media crying about how she lost $10K in bookings and how Toronto is so slow fixing her approval. After this story became public, the only avenue she left the city is to tell her to go f herself as it isn't her primary residence and cannot be a short-term rental as she does not comply with the by-law.
toronto.citynews.ca
Condo owner loses $10K in Airbnb bookings over address mix-up
A Toronto woman is speaking out over what she calls a very frustrating attempt to legally get a condo listed on a popular web platform.
toronto.citynews.ca
A mortgage broker bought a pre-construction end unit townhome in barrie in 2020 for 585 as an investment. Market price almost doubled and then pulled back before closing. His mortgage payments are $3500. That means he borrowed in the ballpark of 500k. Rent is in the ballpark of 2500. Could probably sell for ~650k. If he sells, there are real estate fees and hst on the minus side (in the ballpark of 105k). If he made money, anti-flipping law kicks in and it is 100% taxable income. His "investment" is looking closer to speculation and about to kick his ass.
www.simcoe.com
Should you walk away? What Simcoe County experts are telling new home buyers
New home buyers face challenging decisions as homes are built and closing dates approach
www.simcoe.com
Mikedezo44
Well-known member
That's assuming he is legit like he says, paying taxes. Indian guy came to buy something from me last night. Said he's flipped/held 11 houses for as little as 2 or 3 months on some of them in the last 8 years. I asked how he did it if he had a corporation for taxes and what not, and he said if you only do a couple in a year no one asks questions. So I guess the whole 1 year principal residence thing is only a guideline? In other words he wasn't too worried about giving the government their cut.
Anti-flipping law is new. Now, they still may not catch people as the government has been intentionally ostriching on the whole mess. Anti-flipping law doubles the tax payable but if was already paying zero and not getting caught, this law won't affect him. If government finally proactively enforces (and ideally issues penalties of at least double the anti-flipping tax payable) things may improve.
If you can reasonably explain why you’re switching houses within a year…CRA forgives you.
But that assumes you even get questioned on it.
Knew a guy that would buy a house, ‘move into it’ while he did renovations, wait a year, and sell it.
Meanwhile his next house was already rented and waiting for him to ‘move in’ again. Rinse and repeat.
Guy was a mortgage broker, real estate agent, and his own PM for the flips.
I 100% recommend having camera's in house if you selling and record all viewings. (let them know)
The pettiness of people is mind blowing. For the person that bought our home we recorded every visit, we are thankful for this as they tried to pull a few questionable things.
#1 Claiming water damage where there was none and never was.
#2 Trying to force the home inspector to put it in his report. (he did not and showed them numerous times no issues)
#3 Standing on our furniture to point out non-existing water damage.
#4 Touching our property (motorcycle etc.)
#5 Dropping garbage in our house (wrappers etc.)
#6 Blocking, moving camera's
This was all after she had purchased the house, and I am sure we missed a few things.
While none of these were life altering, I have to wonder how they would have behaved if there were no camera's in the house....
The pettiness of people is mind blowing. For the person that bought our home we recorded every visit, we are thankful for this as they tried to pull a few questionable things.
#1 Claiming water damage where there was none and never was.
#2 Trying to force the home inspector to put it in his report. (he did not and showed them numerous times no issues)
#3 Standing on our furniture to point out non-existing water damage.
#4 Touching our property (motorcycle etc.)
#5 Dropping garbage in our house (wrappers etc.)
#6 Blocking, moving camera's
This was all after she had purchased the house, and I am sure we missed a few things.
While none of these were life altering, I have to wonder how they would have behaved if there were no camera's in the house....
You don't even need a valid reason, last time I was questioned by the good 'ole CRA. Timeline doesn't matter, just needs real proof you moved as a primary residence at the time.
The consensus seems to be that over a year CRA is less likely to do any digging.
Funniest thing is that the only proof I had at the time that I lived there was Amazon deliveries to the address with my name. For obvious reasons, drivers licenses and utilities/internet do not count. So I guess if you plan to fake primary residence, just send a few Amazon parcels there...
The anti-flipping law has requirements. "Just because" isn't good enough if you are at less than 365 days of ownership. There are enough outs thought that most people can probably come up with one they can pretend applies to them. Elderly parents seem plausible. Most have some type of "serious disability or illness".
Residential Property Flipping Rule - Canada.ca
"A “flipped property” of a taxpayer is a housing unit located in Canada, that is not already considered to be inventory of the taxpayer and was owned by the taxpayer for less than 365 consecutive days prior to the disposition (12-month holding period) unless the disposition can reasonably be considered to occur due to, or in anticipation of one of the following life events:
The death of the taxpayer or a person related to the taxpayer.
A related person joining the taxpayer’s household or the taxpayer joining a related person’s household (e.g., birth of a child, adoption, care of an elderly parent).
The breakdown of a marriage or common-law partnership of the taxpayer, where the taxpayer has been living separate and apart from their spouse or common-law partner for at least 90 days prior to the disposition.
A threat to the personal safety of the taxpayer or a related person (e.g., the threat of domestic violence).
The taxpayer or a related person is suffering from a serious disability or illness.
An involuntary termination of the employment of the taxpayer or the taxpayer’s spouse or common-law partner.
An eligible relocation of the taxpayer or the taxpayer’s spouse or common-law partner (e.g., generally, a relocation that enables the taxpayer to carry on business, be employed or attend full-time post-secondary education).
The insolvency of the taxpayer (e.g., due to an accumulation of debts).
The destruction or expropriation of the property (e.g., where the property is destroyed due to a natural or man-made disaster).
In the case of a taxpayer who owns a right to acquire a housing unit located in Canada, the 12-month holding period resets once the taxpayer who entered into a purchase and sale agreement secures ownership of the property. "
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And for the small percentage that do, the penalty isn't that bad. If you only catch 10% of the people, the fine needs to be 10x the benefit for most people to avoid the risk. In this case, they catch <<<1% and the fine is ~0.5x. Even if you get caught you win. If government kept the entire selling price of the house as proceeds of crime, most people would stop playing the game.
I've often referred to my 1960's experience where a tradesman's gross wages would pay for a house in three years.A mortgage broker bought a pre-construction end unit townhome in barrie in 2020 for 585 as an investment. Market price almost doubled and then pulled back before closing. His mortgage payments are $3500. That means he borrowed in the ballpark of 500k. Rent is in the ballpark of 2500. Could probably sell for ~650k. If he sells, there are real estate fees and hst on the minus side (in the ballpark of 105k). If he made money, anti-flipping law kicks in and it is 100% taxable income. His "investment" is looking closer to speculation and about to kick his ass.
Should you walk away? What Simcoe County experts are telling new home buyers
New home buyers face challenging decisions as homes are built and closing dates approach
If you screwed up you could rebuild, even mid life, and retire mortgage free.
Now you're lucky to get into the market and one screw up is financially fatal.
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