Property Management

[onlybrinley]

Hello,



This is my first post in this forum. I am trying to get as much information as possible because I plan to begin investing in the future, so hopefully when I do I don't get too many surprises.



My question today is if I were to set up an incorporated business and manage a property under the business name in Ontario, would I need to be a licensed real estate broker even though it is my property?



Thanks

Errol Liburd

 

[Sherilynn]

In many cases, real estate investors are better off not incorporating. You should consult an accountant who is experienced both with real estate investment and corporate taxes.



You should be able to manage all properties in which you have a vested interest without requiring a license, regardless of whether or not you are incorporated.



I would advise that you do a lot more research and perhaps join a local investment club (possibly REIN, but there are other good organizations as well) before you take the leap into real estate investment. An investment (of time or money) in education is usually a good investment.

 

[onlybrinley]

Thanks a lot for the information, I definitely plan on investing more in educating myself.



Thanks

Errol Liburd

 

[invst4profit]

Do not incorporate. There is no benefit, you will be taxed higher than personal income tax, unless you plan on having 4 or more employees.

When you start in the business I highly advise you self manage your first few properties. As you grow you can then transition into managing a property manager when you have the first hand experience to do so. If you have not learned how to manage properties you will have no idea what to expect or how to manage a manager.

Far to many novice investors enter the business believing it is a passive investment only to discover (too late) their management company is skimming off all their profits, placing undesirable tenants and hiring family members at inflated prices to perform unnecessary work.

 

[Thomas Beyer]

You do not need a license to manage your own property.



The question on whether it makes sense or not to incorporate is further discussed in a number of posts, for example here: http://myreinspace.com/forums/p/10292/54272.aspx?#54272

 

[jeffjas]

 

[jeffjas]

[quote user=invst4profit]Do not incorporate. There is no benefit, you will be taxed higher than personal income tax, unless you plan on having 4 or more employees.

When you start in the business I highly advise you self manage your first few properties. As you grow you can then transition into managing a property manager when you have the first hand experience to do so. If you have not learned how to manage properties you will have no idea what to expect or how to manage a manager.

Far to many novice investors enter the business believing it is a passive investment only to discover (too late) their management company is skimming off all their profits, placing undesirable tenants and hiring family members at inflated prices to perform unnecessary work.




You've obviously never heard of the $750,000 capital gains exemption for
small businesses. The tax rate depends on your earnings so not sure why
you say that you would be taxed higher than personal rate which is as
high as 45% and finally you can claim losses and accumulate loses and
carry-back or forward.........So there are benefits just depends on
someone's personal situation and preference

 

[housingrental]

Errol - Not in Ontario, unless managing a condo complex

 

[onlybrinley]

Thank you all for your input. I definitely have a lot to learn.



Thanks again.

Errol