Dear Friends,
What is better option for an investment property? A student rental or new home; ‘my’ analysis and survey suggest,
Student rentals are normally very old (> 20 Yrs) and extremely used houses, requiring regular maintenance. But return is better and sure in comparison to new home. But if I am not around to look after the rental property; with 4-5 students renting in, even a minor repair issue may be un-manageable.
Now, looking at gain in house price over the time; gain on a new home, especially in initial years is more (again comparably). So even with lower or no rental returns, a new home may give better returns.
Others’ feedback is appreciated.
Ben
... and also the buying new home is eligible for some tax breaks/ incentives on Land Tax?
-ben
Location: Western Hemisphere
Posted on: 25-11-09 09:34:45
My biggest issue is not the age of the property but the potential renters themselves. While mine doesn't necessarily cater to only students, I get inquiries from interesting to shady characters. In the long run, these people would end up being the worst tenants. For example, I had 2 guys with their truck bed loaded with their belongings and were going around looking for a place to move in; another one asked me if I was muslim (he apparantly rented only from muslims); another one wanted to move his furniture for "few days" but didn't want to "yet" sign the lease or pay the rent...and so on.
Anytime, I hear contradicting statements, I back away. One guy kept saying how lousy my property was and how great his current apartment was and then 15 seconds later switched it the other way around. He did that several times until I told him to leave and call me after he made up his mind.
Depressed markets like Windsor can do wonders like the above 
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Dimple2001
For me Rental Prperty is not a very good idea untill you can find good tenats for a long time.i know 2 families who purchased a house jointly & put thier 2 sons who were students in waterloo university + got some other students for property.
If you are in this type of situation where you can find teneats for long time , it is good otherwise it is more painful.
However, If you buy a new house & do some modifications , you can make a good profit in fast developing areas like brampton.
Dimple2001
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How is the Tax treatment for Rental property? Do you get some benefit on that or it it your rental income-expenditure= net income from property.
please explain
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Driller the thriller
Location: Western Hemisphere
Posted on: 25-11-09 11:26:33
Quote:
Originally posted by desi_driller
Dimple2001
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How is the Tax treatment for Rental property? Do you get some benefit on that or it it your rental income-expenditure= net income from property.
please explain
Not quite sure I understood your question in its entirety. However, rental income is "Earned Income" for tax purposes. Therefore, any loss against the rental income can be subtracted against your other earned income. To that extent, it becomes a tax advantage. Although, you will also take a hit on the RSP contribution room when rental loss reduces your earned income.
For example:
Employment income - $50k
Rental Income - $6k
Deductible rental expenses:
Utilities, insurance, interest on the mortgage, property tax, repairs, maintenance, cost of gas for traveling to the rental property for whatever reason, and so on
Let's say that amounts to $8k.
Hence your earned income is now - $48k.
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Dimple2001
