Enter city, area, postal code or MLS� number:
Thursday, April 7, 2011
Real estate: A ‘Secret’ Tax Shelter
We at MyHomeAgent have been speaking for years about the benefits of Real Estate Investing. Here is an often overlooked benefit. Step up your game Calgary and Invest NOW before the interest rates and prices rise.
A Great Article By Jason Heath as a Special to the Financial Post
TFSAs have been a welcome addition to the tax shelter landscape in Canada, but they leave something to be desired for those with substantial assets and maxed out RRSP and TFSA room.
Film limited partnerships have disappeared, charitable donation tax shelters were flawed from the start and the investment tax credit for flow-through shares may or may not be extended in the next budget.
Real estate is often overlooked in the quest for tax reduction and deferral, let alone income generation and inflation protection. If real estate is all of these things, why doesn’t everyone own a rental property? The answer is simple – money.
It’s not that investors don’t have the money to get into the rental property market, because this can be easily accomplished with leverage and minimal monthly carrying costs. The problem is there is simply no money to be made by financial professionals when it comes to rental real estate. The result is that rental real estate is a secret tax shelter that few people ever consider.
Investment advisors sell stocks, bonds and mutual funds. Insurance agents sell insurance policies. Accountants sell tax preparation services. Real estate agents sell real estate, but they tend to sell real estate from a vendor to a purchaser to be used solely as a principle residence.
So rental real estate ends up being a golden goose, elusive, yet attractive.
According to Harvard professor Niall Ferguson in The Ascent of Money, “The original property game we know today as Monopoly was actually invented back in 1903 to expose the unfairness of a social system where a small minority of landlords [took advantage of] the majority of tenants.
“What the game of Monopoly tells us, contrary to its inventor’s intentions, is that it’s smart to own property.”
First, a lesson in rental real estate taxation. Rental income is taxable and rental expenses, including mortgage or line of credit interest, are tax-deductible. In many cases, if a property is financed, it will run at a loss for tax purposes creating a tax deduction against all other sources of income and therefore, a tax refund. In the meantime, real estate values grow tax-deferred until an eventual sale. Even if a property runs at positive cash flow for tax purposes, depreciation can be claimed to wipe out some or all of the taxable income inclusion.
Rental real estate has been described by some as the equivalent of a super-charged RRSP. What is a traditional RRSP? It’s a tax-deferred savings vehicle; contributions are tax-deductible; it provides a future income stream; and it’s an investment asset. Rental real estate incorporates all of these features, plus there’s no pre-determined maximum tax deduction limit like with RRSPs; withdrawals aren’t forced at age 71 like with RRIFs; contributions can be financed and the interest can be deducted, unlike RRSP loans; and the taxes paid on selling a rental property are at the 50% capital gains tax rate, unlike RRSP withdrawals which are fully taxable.
The Harvard and Yale endowment funds have more than 50% of their assets invested in non-traditional asset classes, like real estate. The Ontario Teacher’s Pension Plan, the largest single-profession pension plan in Canada, has 18% of their pension assets invested in real estate. Maybe Harvard, Yale and the OTTP know something the mainstream investment community doesn’t know.
Call us anytime to discuss
Monday, April 4, 2011
RichDad Kiyosaki in Calgary
Categories:Real Estate Investing in Calgary
It's that time of the year again. Robert Kiyosaki’s The Rich Dad seminars are back in Calgary for April 4, 5, 6. Be warned, you will not get any useful information at this free event however they will SELL you the idea that the 3 day weekend seminar for $500.00 will supply you with all the information you need to make millions in Real Estate.
Should you spend the $500 and attend the 3 day event – you will be exposed to very little useful Real Estate knowledge and instead you will be highly pressured into purchasing the Advanced Training Courses with costs starting at $5000.00 all the way up to $45,000.00. Yes you read that right - $45,000 to learn about investing in Real Estate.
We at MyHomeAgent attended the 3 day weekend some years ago so we are very confident in warning others to stay away from these seminars. Unfortunately the only people that will gain wealth from these seminars are both Robert Kiyosaki and the Wealth Intelligence Academy (Russ Whitney). If you want to learn how to invest in Calgary Real Estate properly with ZERO cost to you, call us today. We will explain the following:
· Cash Flow Analysis
· Mortgage Approvals
· Tenant Screening
· Creative Financing
· Zero Down Deals
· Finding Deals
· And much more...
Save your hard earned money. For your safety – please do some internet searches of the following:
Rich Dad 3 day Seminar
Russ Whitney Seminars
Wealth Intelligence Seminars
Also please view this CBC Marketplace video that exposes some of the 3 day weekend.
Before you get caught up in the hype and emotion – take a step back and do some critical thinking.
As always, call us anytime to discuss
Categories: | Alberta Economy | Awesome Tips | Buy a House In Calgary | Calgary Buyers | Calgary City Assessment | Calgary Commercial Real Estate | Calgary Downtown Core | Calgary Economy | Calgary Foreclosures | Calgary Home Buying | Calgary Home Repairs | Calgary Homeowners | Calgary House Tips | Calgary Landlords | Calgary Market Trends | Calgary Mortgages | Calgary No Qualifying Deals | Calgary Real Estate | Calgary Real Estate Data | Calgary Real Estate Investing | Calgary Real Estate Market | Calgary's Best Realtors | Canada Revenue Agency | Canadian Banks | Canadian Economy | Canadian Mortgages | CMHC Insurance | Contest | Copperfield | Darren Weeks | Denis Hrstic | Economics | ELITE Buyers Program | Elite Results | Elite Sellers Program | Elite Service | Energy Saver | Fast Track To Cash Flow | Fight Aids Save Taxes | First Time Buyers | Global Economics | Happy Customers | Home Inspections | Household Appliances | Inspiration | Living in Calgary | Motivation | MyHomeAgent | Okotoks | Pineridge | Real Estate in Canada | Real Estate Investing | Real Estate Investing in Calgary | Remodeling | Renovation | Save Your Money | Sell your Home in Calgary | Silverado | Smile Calgary | Stop Foreclosure | Testimonials | Top Producers | Tuscany | Unemployment | VIP BUYERS PROGRAM | Zero Down Calgary