So I am brand new to real estate investing. I am currently looking for some deals and crunching my numbers. I am from Alberta, Canada. Some rules and conditions differ between the United States and Canada. I am currently self employed and pay myself an average wage from my company earnings. The company also makes a small profit.
My Question is : How should I purchase my first home ? Should it be personally bought? Or through my company?
I would prefer to not pull anymore income from my company because then I will have to pay more taxes. If the money is left in the company and it purchases the property then it may be wiser than losing money to taxes.
Has anyone ever dealt with this before? I have a friend that has set up an entirely different company to purchase and hold the homes in conjunction with his existing company.
Any help would be greatly appreciated. Thanks in Advance for your time.
@Jon Marois , if you make money, weather it is in an LLC, Sub S corp, a regular corp, or even in your own name, there will have to be taxes paid. You can do things to save on taxes, but profits are taxed. If you don't pull income out then the corporation will be taxed on the profit, then you will be taxed when you later take a dividend. If it has pass through taxing status then you are taxed the year you make it regardless of if you take it or leave it in.
@Jon Marois , I do think it will depend on whether or not you can qualify for a mortgage personally. If you can qualify personally, then you should buy it in your own name. Taxes are lower and less overall maintenance of books so to speak.
In Alberta, we get the added benefit of security in the event you default on your mortgage. A lender is not able to sue you for any deficiency judgement.
Great help. Thanks guys.
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