If you are interested in rental properties I suggest reading Spex's excellent topic on the subject in BFI.

Unfortunately while I believe rental real estate is a great investment in the States in Canada it is a waste of time.

How so ?

Tenants have way too many rights. The deck is completely stacked against a landlord.

The financing requirements for rental properties are unfavourable compared to the States.

The rent to home value at least in the markets I'm familiar with are considerably worse than in the States.

If I was going to do anything with real estate in Canada I'd get into private lending over being a landlord.

+1

My parents owned rental properties. One of the tenants they had completely destroyed the town house and then successfully sued my parents for overcharging on rent because of new laws that came in. Everybody in the town houses had agreed to pay a certain amount of rent, but then one figured out that they could sue and they all sued their respective landlords. I'm fuzzy on the details, but I'm pretty sure it was all ridiculous. Also, as far as I know you can't ask for a damage deposit and it takes a lot of work to get them out (a lot of people end up selling).

It varies from province to province but at least in Ontario, Quebec, and BC it is illegal to ask for a damage deposit. I assume it is the same in the other provinces.

At least in Ontario the amount you can increase the rent by is also dictated by the government. So basically the entire province is rent controlled.

Evicting a tenant who doesn't pay his rent is a long and drawn out process that takes months.

In Alberta you can ask for up to one months rent as a damage deposit.

When this suing happened the laws that changed how much you could increase the rent by had just come out. There was retroactive stuff included as well I think, which I think is what the tenants sued on, but it was a long time ago so I'm not sure.

Also, after trashing the place (multiple cleaning crews + about 30 garbage bags + renovations for the next tenant), there was nothing my parents could do about it as far as I know.

Not all of the tenants were like that though. Some were just fine.

Henry,

I'd appreciate a link to that rental property investment thread if you can find it.

I've rented about 5 places in BC over the last 5 years and I've been asked for and given a 1/2 to full months rent as a damage deposit for all of them. 2 of them were through a property management company, were they breaking the law by asking me for a damage deposit?

http://forumserver.twoplustwo.com/30...vesting-99351/

Actually no. In BC you can ask for 1/2 a month's rent as a security deposit. I was wrong before. Ontario though you can't.

In Quebec it's illegal to ask for a deposit as of 3 yrs ago I believe.

Where do you guys change your USD? I use my bank for anything under 5k (2-4 cents worse than xe.com) and I use a currency exchange centre in vancouver called the bullion for anything larger than 5k (1-2 cents worse than xe).

I'd love to hear any other good and practical forex solutions.

I thought you could ask for more also if Pets involved. Also keep in mind the CDN real estate market has fared well and is exploding again. While in the USA foreclosres last quarter were through the roof.

I cant imagine not getting a damage deposit. What motivation do tenants have to keep the property maintaned and clean when they move out?

ive got a financial advisor that uses the corporate rate @ about 1%.
wish it hadnt taken me this long to figure out the best way.

ids that through your bank or how did you set that up?

invest 100k with td waterhouse and you can get a advisor that charges 1.25% on investments. my guy does the currency trades for free.

Great thread guys. I am a Quebec resident and have been marginaly profitable over the last five years. I don't beleive I fall under the definition of a proffessional player (My primary income is from work, and as I said I have been only marginaly profitable). Does Quebec have any additional regulations or different interpretations of poker winnings (compared to what has been discussed in the thread)? Also, I am looking for a Quebec tax proffessional who has some understanding of this area. Any tips on how to locate a reliable and knowledgable one?

Another area I am confused about is what to do with large cashes in tournaments. To take an extreme example, if I were to have a Sunday million win, how would I deposit the winnings without triggering an automatic audit? I get a bunch of funny questions at the bank just trying to deposit a 4k check, can't imagine how it would be with a 200k one. Wether the tax is owed or not, it would certainly be an unpleasant experience to be audited. Any thoughts on this?

Quebec doesn't have any different tax rules in this respect.

Large tourney wins are likely taxfree even if you are otherwise a professional player. Just wire the whole amount to your bank account to avoid most routine questions from the bank and CRA. One large transaction will not automatically get you audited. If you did happen to get audited, you just have to tell them you got lucky in a poker tournament and show them some proof of the win. It is 99% it won't go further.

To find a knowledgable tax person, just ask them if gambling income can ever be taxable. If they insta-auto say no then they aren't qualified and you can look elsewhere. There is no list of tax people who have thought enough about it to point people to and large firms are no more likely than sole practioners to know about the topic.

The Sunday Million win is possibly taxable under paragraph 56(1)(n) of the Income Tax Act (and I don't share TorontoCFE's confidence that it would not be taxable to a pro, either)....

Subdivision d
Other Sources of Income
Amounts to be included in income for year
56. (1) Without restricting the generality of section 3, there shall be included in computing the income of a taxpayer for a taxation year,
[...]
(n) the amount, if any, by which
(i) the total of all amounts (other than amounts [...] received in the course of business, and amounts received in respect of, in the course of or by virtue of an office or employment) received by the taxpayer in the year, each of which is an amount received by the taxpayer as or on account of [...] a prize for achievement in a field of endeavour ordinarily carried on by the taxpayer, other than a prescribed prize [...]

It should go without saying that the Governor-in-Council has not declared Sunday Millions to be a prescribed prize...!

I sent this via PM to WTFRUDoing earlier ... but since we're still talking about it.

The TD Waterhouse preferred exchange rate is still only marginally better than the TD Borderless USD account, and that's still about 1.1-1.2 cents off of the xe mid-market rate.

If you are moving large sums of money, you may want to consider other brokerage houses that give you direct access to the foreign exchange market. For example, Interactive Brokers can give you spreads that are one hundredth of a cent off of the mid-market rate during the middle of the day (you get to trade directly on the ForEx market), for a commission of $1 per $10000 US transferred. $2 to transfer $10000 is a big win in comparison to $120 (at TD).

However, there is a drawback: if you use EFTs at Interactive Brokers, there's a 60 business day holding period for flipping the cash from a CAD in, USD out transaction.

I was considering this. I'm going to incorporate before the end of the year anyway and for an extra $1100-1300 I can get a aged shelf corporation that is two years old. Is it worth it or do lenders know it is just an aged shelf corp?

Also some aged shelfs come with credit files. Is that worth the extra money and what exactly is it? My guess is a credit history of some kind.

If you want credit through the company soon and you can get a 2 yr old + company, then it can be worth it IMO. Avg is $25-50 a month of aging.
Otherwise, no.

I just spent a very painful year refinancing the company I work for.
Most lenders won't look at you unless you have 2 or 3 years in existence - they don't seem to care if the ownership is different but they want to be able to say there is a track record. A shelf company will come clean - all tax returns and gov filings done.

I would have a hard time justifying paying for a credit history - that is going to be small payments and essentially loans from related parties that were reported to the credit bureau.
The small amounts won't likely help build a good enough history for meaningful amounts and most lenders don't care much anyways - they will lend to no credit just as likely as to little credit.
I think that is a money maker for the lawyers.

Personally, I am setting up a corporation for my personal use (one in Ontario and one in Nevada) and will def get it done this year - even Dec 09 is much better than Jan 10 appearance wise.

$25-50 is considerable better than I have seen. The source that google keeps taking me to is about $75/month. They have a Federal 18 months for $1365 and 2 years and a month for $2704. An Ontario 2 years and 3 months $2415 or a 21 months for $1865. Do you have a recommended source?

I'm not really concerned about getting credit though the corporation. There is some fairly high end office equipment that I was going to pay cash for that I might lease though the corporation but other than that I really have no need for credit. My concern is for personal credit. There is a residential property that I'm interested in and which I hope to squeeze the builder as we get closer to the HST deadline. When it comes to qualifying for a NIQ mortgage having a corporation that is over 2 years helps. I figure it would cost me about $400 to incorporate myself so if I can get something that is 2 years plus for $1200-1400 I think it would be a worthwhile investment.

Those are decent market rates right now - they have been bid up in the last year or so, so finding >1 yr for less than $1,500 is pretty good.

I trust bdc-canada.com but incorpdirect.ca is ok.

Thanks.

Yeah those were from BDC

I do have an update on the method of reducing your tax (should you be taxable)
to 3% + your normal tax rate on whatever money you live on.

A couple of people are using this method now. I got another legal opinion that it is ok. The cost to do it right is 10k upfront, ready to go in 1 week, so it costs about 1/2 what I guesstimated originally. The cost to do it the half-assed way is 4k.

I'd go the right way or it's a waste.