Spring into Spring With Smarter Real Estate Investment Strategies
Hunting for the Perfect Investment Strategy:
Why Real Estate Fits the Bill
April is here! That means a few key things: one, sunnier evenings. Who doesn’t like to finish a long day in the office, only to look outside and see there’s still a bit of sunlight left to enjoy? Two, tax season looms closer.
Then, of course, there’s Easter for those who celebrate it. Even so, hunting for colorful Easter eggs on a rainy spring day may be a distant childhood memory. Now, as an ambitious investor, you are on a different hunt, and it’s not for something that you can fit neatly in a flimsy little basket: an investment opportunity that is both rewarding and relatively interesting.
This month, to keep with the spirit of tax season, I want to share major tax benefits of investing in real estate:
Real Estate Tax Benefits in Canada
Canadian real estate investors can also benefit from generous tax deductions. In fact, the Government of Canada has outlined an extensive list of deductible expenses. Some examples of deductible expenses include repairs and maintenance, property taxes, insurance, management and administration fees, utilities, travel expenses, and advertising.
Expenses fall into two different categories: capital expenses and current expenses. Capital expenses may enhance a property and increase its value long-term. For example, if you completely renovate the exterior of a property in an attempt to modernize it, that would be a capital expense. A current expense, on the other hand, may be needed very frequently. Such expenses tend to be necessary to maintain basic quality standards but don’t generally boost a property’s overall value.
Additionally, Canadian real estate investors may take advantage of Capital Cost Allowance, or CCA. CCA covers any assets that depreciate in value over time. You will not be able to take complete advantage of CCA upfront and instead will see these numbers reflected on your tax returns over the course of several years.
Final Thoughts
Sure, nobody really “looks forward to” tax time. There are so many documents to look over. If you stare at them for too long, all the words and numbers seem to merge into one confusing mess. But when you take into account what you stand to gain as a real estate investor, tax time may soon feel less like an inevitable inconvenience and more like an advantageous chore.
Happy spring and tax season!
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Instant Equity
The phrase “instant equity” should refer to the difference between what your home is worth at the time of closing and your mortgage balances — i.e., what you owe on it. For most buyers, that would mean their instant equity was the amount they had put down on the home.
Equity is the difference between what you owe on your mortgage and what your home is currently worth. If you owe $150,000 on your mortgage loan and your home is worth $200,000, you have $50,000 of equity in your home.
Your equity can increase in two ways. As you pay down your mortgage, the amount of equity in your home will rise. Your equity will also increase if the value of your home jumps.
liezelinvestments.com is a real estate investment company. We have been actively involved in the GTA area real estate investing for a number of years. Our mission is to provide quality housing for quality tenants, while at the same time providing an above-average return on investment (R.O.I) for our investor partners and ourselves. It is truly a win-win-win way of investing!
Liezel offers her investor partners hands-free investment opportunities. If you are interested to learn how to earn an above-average return on your investment, backed by a solid asset, and without a hassle of being a landlord, please contact Liezel.
For more information about Liezel and her investment program,
please call 416 522 4221 and email her at liezel@liezelinvestments.com or visit liezelinvestments.com.
