All Forum Posts by: Luc Boiron

I don't think this would be a problem from a tax perspective.

From other/legal perspectives, there could be some differences. For example, what if he wants to continue one lease and not the other? What if you need to evict the tenant, you now need to evict on both leases. Also, does the zoning allow you to rent to two parties? Does the zoning allow you to rent the guest house separately to business purposes?

I understand why the tenant is asking for this, but realistically, there should be no issue with the tenant signing one lease and then allocating half of that cost as a business expense for tax purposes. It's harder for the CRA to challenge with separate leases, but really doesn't seem necessary.

This isn't legal or tax advice, just my $0.02.

@Account Closed

I look all over the GTA, but I'm currently focusing on flips in the Brampton area.

Welcome @John Craig

What type of real estate investments are you looking for? Buy and hold or renovate something?

I'm active in Brampton right now, not for any particular reason other than that I learned that market and now have a good idea of what a deal looks like there, which makes me be more confident in my offer prices.

You might want to look into rentals rate differences. Here, it costs a lot more to heat with electricity than to heat with gas forced air. Rents definitely reflect it, you get less in rent because the tenants know that they will pay more to heat.

@Joseph Skates All the dumps I have gone to in Ontario that take yard waste don't throw it in the landfill. They make you separate the waste. I have seen some dumps that actually chip branches, and local residents can get the mulch produced for free or cheap. 

They may be careful with any wood now, because of the asian longhorn beetle, but check with a couple of your nearest waste transfer stations to see what they do with yard waste.

@Minna Hu I don't know any lawyers in Kingston. You might want to look into using a paralegal who specializes in this kind of stuff though, as they are allowed to go to small claims court and are usually less expensive than lawyers, though many are just as good for these matters.

@Nick Ovington

As @Ming Lim said, to cash flow in Toronto you need to do more than just buy a house and rent it.

However, if you're able to do the same thing outside of Toronto, you can get even better cash flow.

For example, I bought a bungalow in Orillia a few years ago with some partners. We paid $220,000, and rented out the whole house for $1,650, which was high for Orillia. A year later, we converted the property to a duplex (we needed a minor variance from the Committee of Adjustment, got refused, and I successfully appealed to the OMB).

The reno to convert to a duplex legally was $50,000. All in, the purchase + reno was $270,000. We rented the upstairs for $1,450 and the basement (both 3 bedroom units) for $1,270. Total rent of $2,720, passing 1%. We put in separate hydro meters, so with tenants paying their own hydro we cash flowed quite well.

So, good cash flow is very possible in Ontario, though Orillia doesn't have the appreciation that Ming gets in Toronto.

@Bernie Huckestein

I haven't done it yet, but I have thought about doing something similar where the price is not working for me. You save on quite a few costs by them holding it - you don't need to pay legal/title transfer costs to buy and sell, any local transfer fees don't need to be paid, title insurance, borrowing costs, etc. You also have less money in the deal and less risk in that way. Add those all up, and look at the numbers in detail (not just 75%, but run the actual numbers and see what profit remains for you).

With this you can see if it is worthwhile. $88k might still be a little high but you might be able to come close.

Make sure you have an ironclad contract that requires them to sell and directs the additional profit to you. You might even want to register this on title to make sure there are no issues. You could also get a POA for this specific property for a specific purpose, but the seller may not like that.

I don't think this is a bad option, just be careful.

@Jacob Perez There are a couple things you can do. Obviously, you can search for certain terms you want to find, and see what results come up under forums. The main way I keep track of what is happening locally is to set up keyword alerts. You can set up alerts for any mentions of local areas. For example, some of my keyword alerts include "Canada", "Ontario", "Toronto", "GTA". You might also want to add things like "Hamilton", "Niagara", "Brantford", etc.

Welcome to the forums!

 Just to add to this, I believe that only the two new lots would be subject to HST, with the remaining portion of the lot not subject to HST.

That could make it worth only dividing into 2 instead of 3. One of the first things you should do is go on the website for the municipality and look at the zoning by-law. Look through the maps, and find the zoning for this property, then look through the by-law to see what lot sizes are allowed here (minimum lot width/depth/area).