Rents going down ...

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BC Landlord
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Re: Rents going down ...

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JLives wrote: Aug 25th, 2021, 4:01 pm Um, Mr. Landlord sir, that is the Residential Tenancy Agreement that tenants sign with, uh, landlords.
You don't need to "sir" me. FYI, the "RTA" stands for "Residential Tenancies Act", and the Residential tenancy agreement form is RTB-1. At least, here in BC.
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Re: Rents going down ...

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BC Landlord wrote: Aug 25th, 2021, 3:38 pm
foenix wrote: Aug 25th, 2021, 2:41 pm The operating costs are deducted straight from the rental revenue.
If you are a corporate landlord, yes. But if you are a small landlords, no. In this case, rental income just adds to personal gross income.
You must not do your own taxes Mr. Landlord. All expense related to generating rental income is deductible for corporations or mom and pop operations at tax time. In the case for you, those deductions are subtracted from gross rental income then your net rental income adds up with your gross personal income. That's basic rental taxation 101 and if your creative like I wrote before, one can take a chance about those things if you're below the "red flag" limits for the CRA for those deductions. But you would have to know an accountant that knows those ranges and is willing to give it to you. If you don't do your own taxes then that option is not available to you because the accountants won't do it for you.
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Re: Rents going down ...

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foenix wrote: Aug 25th, 2021, 5:59 pm You must not do your own taxes Mr. Landlord. All expense related to generating rental income is deductible for corporations or mom and pop operations at tax time. In the case for you, those deductions are subtracted from gross rental income then your net rental income adds up with your gross personal income.
I do have an accountant looking after my finances, but you don't need to be a guru to know that much. Your answer sits in lines 12599 and 12600 of the T1 form.
The difference in between what I said, and what you re describing here is like a difference between
A+B-C, and A+(B-C). Zero, .. no difference. The bottom line is, if your combined income (personal+rental) doesn't put you in a higher tax bracket, thus not paying much taxes (if at all), then you have nothing or very little to deduct from.

It's not accounting. It's math.
Last edited by BC Landlord on Aug 25th, 2021, 7:04 pm, edited 1 time in total.
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Re: Rents going down ...

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:topic:

Rents going down
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Re: Rents going down ...

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BC Landlord wrote: Aug 25th, 2021, 7:01 pm
foenix wrote: Aug 25th, 2021, 5:59 pm You must not do your own taxes Mr. Landlord. All expense related to generating rental income is deductible for corporations or mom and pop operations at tax time. In the case for you, those deductions are subtracted from gross rental income then your net rental income adds up with your gross personal income.
I do have an accountant looking after my finances, but you don't need to be a guru to know that much. Your answer sits in lines 12599 and 12600 of the T1 form.
The difference in between what I said, and what you re describing here is like a difference between
A+B-C, and A+(B-C). Zero, .. no difference. The bottom line is, if your combined income (personal+rental) doesn't put you in a higher tax bracket, thus not paying much taxes (if at all), then you have nothing or very little to deduct from.

It's not accounting. It's math.
Ummmm no......When I was doing my own accounting and adjusting for when rents went down or when rents went up, I always got to deduct any expenses related to the generation of the gross rental income when rents went down or up. That was called net rental income and that line was added to your total gross income line. One would know that simple fact if one experienced the pleasure of doing one's taxes without the aid of a professional. I did however used them on occasions when I had more complicated year, besides the years when it was just revenue from rents going down and up.
Last edited by foenix on Aug 25th, 2021, 7:55 pm, edited 1 time in total.
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Re: Rents going down ...

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foenix wrote: Aug 25th, 2021, 7:18 pm Ummmm no......When I was doing my own accounting ...
How difficult is it to understand that you need to pay at least some income taxes in order to be able to deduct something from them? I don't think accounting is your strongest point.

Now, having this in mind, how do you expect a small landlord's business to sustain rent controls, as they are? I mean, not being able to catch up with his costs? What's the rationale here?
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Re: Rents going down ...

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BC Landlord wrote: Aug 25th, 2021, 9:30 pm
foenix wrote: Aug 25th, 2021, 7:18 pm Ummmm no......When I was doing my own accounting ...
How difficult is it to understand that you need to pay at least some income taxes in order to be able to deduct from them? I don't think accounting is your strongest point.
Whaaat?....now I'm getting a better picture. No clue hey how taxes work? Even before someone's income tax (payable) is figured out, one has to figure out their overall or gross income and it's the same line where net rental revenue (revenue minus expense) gets added as part of your gross income......got it?.....that's the simplest I can go.
Last edited by foenix on Aug 25th, 2021, 10:19 pm, edited 1 time in total.
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Re: Rents going down ...

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foenix wrote: Aug 25th, 2021, 10:09 pm
BC Landlord wrote: Aug 25th, 2021, 9:30 pm
How difficult is it to understand that you need to pay at least some income taxes in order to be able to deduct from them? I don't think accounting is your strongest point.
Whaaat?....now I'm getting a better picture. No clue hey how taxes work? Even before someone's income tax (payable) is figured out, one has to figure out their overall or gross income and it's the same line where net rental revenue (revenue minus expense) gets added as part of your gross income......got it?.....that's the simplest I can go.
OK, let's see, ...
If your gross personal income is say $8,000, and your gross rental income is $7,000, and your rental expenses are $2,000. Your basic (personal) tax exemption is $15,000.
How much money did you deduct (save) from your taxes, by claiming your expenses?

Now, mind you these numbers are hypothetical, but it gives you an illustration of what I am talking about. Together with rental income, you would probably be above the basic amount, but for many on fixed income, not very much. So, their tax deductions would be miniscule at best.

And you would call such a landlord "greedy" for asking you to pay market rent, after years of taking advantage of rent controls, right?
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Re: Rents going down ...

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foenix wrote: Aug 22nd, 2021, 4:50 pm Ummmm....no. Are they not good tenants? If they are, that's like gold and are you not interested in keeping them? If they aren't, the only advise I can give is.........better luck next time with the pick.
Please share your definition of a "good" tenant. What are the standards they have to meet in order for you to consider them a good tenant?
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Re: Rents going down ...

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kgcayenne wrote: Aug 25th, 2021, 2:08 pm
BC Landlord wrote: Aug 25th, 2021, 1:41 pm …imagine, if a landlord asked you ...

"Hey, you've been with us for a few years and although you are a great tenant, your rent is falling so far behind my costs due to the rent controls, so would you be willing to renegotiate the rent?"
So, what would be your answer, ... honestly?
I would require you substantiate your claim of increased costs.
Thank you for proving the argument that rent controls contribute to high rents. You're saying exactly what BC Landlord and I have been saying; a landlord has to ask for high rent right from the start because their hands are tied on a go-forward basis with respect to rent increases. Your post is example #1 of why rent controls are bad for renters.

Example #2 (which you provided in your other post here) is that tenants in this province seem to know the RTA quite well vs. tenants in another province that doesn't have any rent controls. Why do tenants in BC feel the need to quote the RTA if not for the fact they are at odds with their landlords?

Rent controls do not work in tenant's favour, even though tenants continue to short-sightedly believe they do.

Rent controls in this province haven't changed in some time, yes? Yet apparently, rents have gone down. So what, then, is the contributing factor in this decrease?
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Last edited by Rejigger on Aug 26th, 2021, 9:15 am, edited 1 time in total.
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Re: Rents going down ...

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foenix wrote: Aug 25th, 2021, 12:14 pm
Rejigger wrote: Aug 25th, 2021, 12:07 pm Yes, before tenancy begins, you want to know if the landlord has been a jerk to other tenants. And I'm suggesting that the odds of getting jerk landlords is much lower than the odds of getting jerk tenants, for reasons already discussed.
Government regulations have pitted landlords and tenants against each other before they've even met. As the old saying goes, "paranoia will destroy ya".
That happens even without the "government regulations" so that's a bit of a fallacy.
To borrow your very own argument, this is nothing more than "rhetoric" as you have no way to prove it. You have no way of knowing with certainty, since this province's rental industry doesn't operate in a free market.

I can tell you very honestly that this level of paranoia does NOT exist in the province we spoke of earlier in this thread.
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Re: Rents going down ...

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BC Landlord wrote: Aug 26th, 2021, 8:49 am
foenix wrote: Aug 25th, 2021, 10:09 pm

Whaaat?....now I'm getting a better picture. No clue hey how taxes work? Even before someone's income tax (payable) is figured out, one has to figure out their overall or gross income and it's the same line where net rental revenue (revenue minus expense) gets added as part of your gross income......got it?.....that's the simplest I can go.
OK, let's see, ...
If your gross personal income is say $8,000, and your gross rental income is $7,000, and your rental expenses are $2,000. Your basic (personal) tax exemption is $15,000.
How much money did you deduct (save) from your taxes, by claiming your expenses?

Now, mind you these numbers are hypothetical, but it gives you an illustration of what I am talking about. Together with rental income, you would probably be above the basic amount, but for many on fixed income, not very much. So, their tax deductions would be miniscule at best.
And you would call such a landlord "greedy" for asking you to pay market rent, right?
The example is not only hypothetical, it's a ridiculous made up example in trying to fit a narrative.

First of all if one has 3 mortgages on rentals, and the borrower has only $8,000 of personal income, that won't qualify you to borrow any money for a pack of bubble gum let alone 3 rentals unless it's secured by like assets. The $7000 gross rental income is also ridiculous considering the whining that been going on about jacking up the rent. To have a 7000 dollar annual gross income from a rental means the landlord is charging less than 600 dollars a month. What's that about 4 times less than market value for a house in Kelowna?

Why not use some believable numbers but then again, if one did that, the narrative falls apart, hey?
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Re: Rents going down ...

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foenix wrote: Aug 25th, 2021, 7:18 pm Ummmm no......When I was doing my own accounting and adjusting for when rents went down or when rents went up, I always got to deduct any expenses related to the generation of the gross rental income when rents went down or up. That was called net rental income and that line was added to your total gross income line. One would know that... [snip]
If you're familiar with taxes, then you would be talking about depreciation/amortization and how it typically reduces net rental income to zero.

And if someone argues that a landlord "doesn't have to take depreciation", then that same someone cannot complain that landlords don't spend money on upgrading their rentals. Those two arguments contradict each other, so no need to go there.
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Re: Rents going down ...

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Rejigger wrote: Aug 26th, 2021, 8:58 am
foenix wrote: Aug 22nd, 2021, 4:50 pm Ummmm....no. Are they not good tenants? If they are, that's like gold and are you not interested in keeping them? If they aren't, the only advise I can give is.........better luck next time with the pick.
Please share your definition of a "good" tenant. What are the standards they have to meet in order for you to consider them a good tenant?
~
Good tenants are the one that follow the rules set out by the landlord and the tenant agreement signed between the 2 parties spelling out the terms in a written agreement.
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Re: Rents going down ...

Post by foenix »

Rejigger wrote: Aug 26th, 2021, 9:02 am
foenix wrote: Aug 25th, 2021, 12:14 pm
That happens even without the "government regulations" so that's a bit of a fallacy.
To borrow your very own argument, this is nothing more than "rhetoric" as you have no way to prove it. You have no way of knowing with certainty, since this province's rental industry doesn't operate in a free market.

I can tell you very honestly that this level of paranoia does NOT exist in the province we spoke of earlier in this thread.
~
See that's "rhetoric" also.

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