Tips on buying investment property
Where Should It Be Acquired?
Once you know where you are going to, then you need to sit down with your advisor or Kelowna accountant and determine where your investment property should be acquired. What I mean is, you need to decide if you are going to hold the property personally or corporately versus holding it in a partnership or joint venture.
I have a lot of people ask me in my real estate investment presentations what they should do when they have investments they want to move. You know what I say?
Leave them where they are!
Moving investment properties between the different vehicles (holding it corporately vs. personally, etc) is a high cost venture (property transfer fees, potential income taxes or GST/HST, etc.). Generally on smaller investments (single family homes, duplexes, quads), I don’t recommend changing the structure once it’s done because the cost of changing simply doesn’t justify it.
- Know where you want to go, begin with the end in mind
- Speak with your Kelowna accountant or professional advisor and
- Know where your investment needs to be held for future tax and cash flow planning
The main thing you need to remember when you get into
your first investment property is that you really want to make it easy. Don’t try to get into something that is complex. You need to build your confidence level and knowledge base through investing over time.
A brain surgeon doesn’t just decide that they are going to begin performing surgeries on brains one day and then walk into the operating room! A lot of people who get into the property investment domain want to be where someone else is…but that person is already 20 years ahead of them.
Real estate investing can be very lucrative when done properly so always ensure you get the expert advice to make sure you reap all the possible rewards from your investment.
Ken Davidson is a Chartered Accountant with BDO Canada LLP, with their Kelowna accounting firm. Ken specializes in helping Kelowna businesses that are in start-up mode, companies in Kelowna that are in their growth phase and are ready to take their revenues to the next level, and professionals to secure their financial future with solid investment advice. Ken is best known for his strategic planning advice that positions him as a trusted advisor above and beyond being a Kelowna accountant that gives typical tax planning advice. To contact Ken for a Strategic Business Review to learn how he may be able to help your Kelowna business. email him at email@example.com.