Rents going down ...

[BC Landlord]

Please stop lying. The vast majority of small "mom and pop" style landlords would make more than the Canadian definition of "poverty".

I don't lie. The numbers I gave you above (i.e. $43k+ personal income), are in fact above Canadian and BC median income. So, we are not talking poverty levels. You are just digging yourself deeper and deeper in the hole. At what point would you just concede? Is it so hard?

[foenix]

Have at it, it's also on a CRA website. The reason you don't see depreciation on that list is because it's not allowed in figuring out net rental income for the year. One would know that if one is in the rental game and did their own taxes.

You should correct your post now that you know you're giving false information. Someone might stumble into this thread and believe you, to their detriment.
~

I would suggest someone else have more corrections than me to straighten out.

[foenix]

Please stop lying. The vast majority of small "mom and pop" style landlords would make more than the Canadian definition of "poverty".

I don't lie. The numbers I gave you above (i.e. $43k+ personal income), are in fact above Canadian and BC median income. So, we are not talking poverty levels. You are just digging yourself deeper and deeper in the hole. At what point would you just concede?

$13k-43k

Removed

...13K is way below the poverty line for even 1 person in Canada.....might want to quit before digging oneself deeper and deeper in that hole.

[kgcayenne]

Please stop lying. The vast majority of small "mom and pop" style landlords would make more than the Canadian definition of "poverty".

I don't lie. The numbers I gave you above (i.e. $43k+ personal income), are in fact above Canadian and BC median income. So, we are not talking poverty levels. You are just digging yourself deeper and deeper in the hole. At what point would you just concede?

With the average house price creeping up on $1M, how DO mom and pop landlords with $43k even get a mortgage for their secondary properties? How do the banks just assume risk based on $43k per annum? I don't buy it.

[Rejigger]

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.

Gross rental income is factored-in for borrowing purposes.

Some people use the HELOC on their principal residence for investment purposes. Interest expense incurred for the sake of generating income can be claimed on one's personal tax return (previously Schedule 4, if not on the T776 itself). Therefore, if one uses their HELOC to fund an investment such as a rental, one can claim that interest on their personal taxes.

But, hey, maybe I don't understand taxes.

Regardless, it looks like it's sunk in that the rental expenses used to generate revenue is taken directly out of gross rental income and then that net income is added to one's overall gross income for the year then after all the other personal deductions are applied results in your net personal taxable income which is then used to figure out taxes owing depending on how much income tax was already paid during the year.....but nice effort in trying to confuse what we were discussing......but certainly, I would keep using the accountant, it's a smart move!!

You aren't understanding what BC Landlord is saying because google can't explain it to you. Also, he's relating his personal experience to you. I suspect his experience is that of quite a few in BC because most landlords have to be of a certain age in order to afford a rental property in this province. Most people are trying hard just to afford a principal residence here.

Your continued use of the wording "rental expenses used to generate revenue" is straight off of a website, because no one talks like that except for tax professionals and CRA. It's just a way of saying that you can only claim rental expenses that are directly related to rental income. Don't try claiming that lunch, for example, because you didn't need that lunch in order to generate rental income.

You meant to write "overall total income" not "overall gross income".

But, hey, maybe I don't understand taxes.
~

[BC Landlord]

With the average house price creeping up on $1M, how DO mom and pop landlords with $43k even get a mortgage for their secondary properties? How do the banks just assume risk based on $43k per annum? I don't buy it.

They most likely don't. They just own them already. Not sure what your point is?

[kgcayenne]

With the average house price creeping up on $1M, how DO mom and pop landlords with $43k even get a mortgage for their secondary properties? How do the banks just assume risk based on $43k per annum? I don't buy it.

They most likely don't. They just own them already. Not sure what your point is?

You helped lead to my point. I am quite glad you responded.

If they own them already, how on earth do their operating expenses suddenly exceed rents? Hmmm... how does that happen unless they are doing something else financially that puts them in an enormous hole, and in that case, there is no way that the tenant should be held financially responsible for someone else's financial train wreck decisions.

[BC Landlord]

If they own them already, how on earth do their operating expenses suddenly exceed rents? Hmmm... how does that happen unless they are doing something else financially that puts them in an enormous hole, and in that case, there is no way that the tenant should be held financially responsible for someone else's financial train wreck decisions.

Hmmm, ... property taxes, insurance, maintenance costs, etc ... none of which is static. On the other hand, rent controls make rents pretty much static, unless tenants decide to leave. How is landlord at fault here?

[foenix]

But, hey, maybe I don't understand taxes.

But, hey, maybe I don't understand taxes.

You're correct, you don't understand how to do taxes for rentals that's crystal clear as is BC Landlord's attempt. There's a reason he uses an accountant because he doesn't know how to do them and how net rental income is figured out.....but that certainly doesn't stop you guys from pretending like you do.

[foenix]

If they own them already, how on earth do their operating expenses suddenly exceed rents? Hmmm... how does that happen unless they are doing something else financially that puts them in an enormous hole, and in that case, there is no way that the tenant should be held financially responsible for someone else's financial train wreck decisions.

Hmmm, ... property taxes, insurance, maintenance costs, etc ... none of which is static. On the other hand, rent controls make rents pretty much static, unless tenants decide to leave. How is landlord at fault here?

It reduces you're net rental income which in turn reduces your gross income which is then used to calculate taxable income......so it's a win win for you. Rej....this is for you too.....

Taxable Income vs. Gross Income: What's the Difference?

https://www.investopedia.com/ask/answer ... income.asp

[foenix]

I don't lie. The numbers I gave you above (i.e. $43k+ personal income), are in fact above Canadian and BC median income. So, we are not talking poverty levels. You are just digging yourself deeper and deeper in the hole. At what point would you just concede?

With the average house price creeping up on $1M, how DO mom and pop landlords with $43k even get a mortgage for their secondary properties? How do the banks just assume risk based on $43k per annum? I don't buy it.

43K was the high end it was 13K - 43K....banks don't assume risk like that for peeps making below or near the poverty line so it was just a deflection from not knowing the tax process in figuring out net rental income for the year. No one is buying it.

[BC Landlord]

It reduces you're net rental income which in turn reduces your gross income which is then used to calculate taxable income......so it's a win win for you. Rej....this is for you too.....

So, in your books, reducing net income is a positive thing? Does that wisdom of yours apply to landlords only, or to your personal finances as well? This is getting funny ...

[foenix]

It reduces you're net rental income which in turn reduces your gross income which is then used to calculate taxable income......so it's a win win for you. Rej....this is for you too.....

So, in your books, reducing your net income is a positive thing? Does that apply to landlords only, or to your personal finances as well?

Just messing with you BC....I sorry....

....but then again, what about the tenants expenses going up? .....eating into his disposal income to pay that rent? If that's not a factor for you in a negotiation to change the rental rate, maybe the renter will say the same thing about your increasing costs.

[kgcayenne]

If they own them already, how on earth do their operating expenses suddenly exceed rents? Hmmm... how does that happen unless they are doing something else financially that puts them in an enormous hole, and in that case, there is no way that the tenant should be held financially responsible for someone else's financial train wreck decisions.

Hmmm, ... property taxes, insurance, maintenance costs, etc ... none of which is static. On the other hand, rent controls make rents pretty much static, unless tenants decide to leave. How is landlord at fault here?

Well now.... So, you are claiming that property taxes, insurance and maintenance on a clear title house can exceed what the home is being rented for?

I doubt it.

So, to show you why I doubt it: I’m going to use a property that I actually rented in 1998 for $1250/mo. It was a 3800 sqft house in an executive neighbourhood. Had I stayed, a quick calculation of 4% per year increase would bring us to $3080 monthly rent. (disclaimer: I don’t want to bother with looking at each year’s allowable increase, so nitpick away if you want)

I happened to look at the annual property taxes for that property, and for 2021 it is $4,364.41 which equates to ~$364/mo. This means, that should that property be paid for, and I a sucker enough to rent it this whole time (and contribute to paying off someone else’s mortgage), that his monthly expenses of insurance and maintenance could exceed the remaining $2700/mo in perpetuity?

Not buyin’ it. Nope

Non, je ne pense pas.

[alanjh595]

So, in your books, reducing your net income is a positive thing? Does that apply to landlords only, or to your personal finances as well?

Just messing with you BC....I sorry....

....but then again, what about the tenants expenses going up? .....eating into his disposal income to pay that rent? If that's not a factor for you in a negotiation to change the rental rate, maybe the renter will say the same thing about your increasing costs.

A landlord is not responsible for the tenant's financial issues. If the tenant can't pay the rent (which is not included in disposable income) then they can find a place where the rent is cheaper and free up some extra disposable income.