RealEstate Inside: November 2018 News Report

Welcome back, everyone! This month, we've put together a full lesson plan to boost your real estate smarts. How real estate savvy are you? Looking to increase that pesky credit score, or become an Air BnB? We have some invaluable reads to help you on your way.

“Proficient in Microsoft Excel” used to be a skill every employer wanted to see on a resume, but nowadays it's expected—some would say required. Those not familiar with the many functions and shortcuts of Excel could save themselves a lot of time and effort by learning these handy functions, and this article is the perfect place to start! >>

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Nightmare tenants are a tale as old as landlord time. There are steps we have gone over to ensure good tenants, but sometimes you're just unlucky! There's no such thing as too much information when getting tips on picking good tenants, so be sure to read this story of nightmare tenants and what this landlord learned during the process! >>

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POP QUIZ TIME! How up to date are you on the Personal Information Protection and Electronic Documents Act (PIPEDA)? It began November first and this 20 question quiz could help you understand some of the changes a little better! >>

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Would you want the contents of your offer on a house to be public knowledge? Some people think it should be! Read this article on the auction style bidding process and let us know your thoughts! >>

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Thinking of buying your first home? This article might help to understand some of the monthly costs to expect outside of your mortgage payments to help you get prepared! >>

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Putting your rental properties into a holding corporation could be a good or a bad idea—it all depends on your overall objectives and your regions tax rules. Read this article to find the right questions to ask during your next meeting with your accountant! >>

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Condo or single family house? This is a question many people tend to have when deciding to make a real estate purchase. Things like lifestyle and goals are only some considerations when making your decision. Read this article for some advantages and disadvantages of buying a condo to help you decide! >>

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Cities with a high “walkability score” tend to have higher property values. Is your city walkable? If not, is your city planning geared towards making owning a car optional? This article explains the reasons why “walkability” is an important aspect for future economic growth, and why it should be one of your city planner’s top priorities.  >>

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Do you have a lower credit score as a result of past mistakes but want to get back on track? This article has great tips on how to repair a bruised credit score. >>

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Should you use your rental property as an Airbnb or a long term rental? This article lists both pros and cons to Airbnb and what to consider before becoming a part of the sweeping trend. >>

Investing in Real Estate – Building The Right Team #4: Accountant

As the saying goes, “The only two certainties in life are death and taxes.” Continuing on in your journey of investing in real estate and building your team, you’ll need a good accountant to figure out the latter. Today we are going to talk about why you need a good accountant on your team and how they can help you succeed.

Why Do I Need An Accountant?

The main function of your accountant in relation to your real estate investing is to help figure out the taxable rental income attributable to your rental properties. They will help with filing your tax return, and provide advice relative to your situation and any tax planning that is necessary. All this would also apply to your employment income (if your employed) as this would all go on the same tax return.

How Will My Accountant Help?

Outside of the filing of tax returns, your accountant will help with general tax advice and planning.  Decisions an accountant can help with include:

• Can you expense or amortize a certain repair or renovation?
• How much depreciation expense should you take?
• When is a good time to sell based on tax consequences?

An accountant will also help should you ever get audited by CRA. Basically they will help you within existing tax laws to maximize your after tax rental income, which is really what investing is all about.

What Should I Look For In An Accountant?

As a real estate investor, it is a definite plus to deal with an accountant that has lots of experience with real estate investors. Ask for references from other investor colleagues. Having an accountant with a Chartered Accountant designation is also huge plus.

How Much Will My Accountant Cost?

This will vary depending on your tax situation and the accountant you use. Some charge a flat rate for a comprehensive tax return and some charge per hour. One way to lower your bill will be to have all your paperwork organized for tax time so your accountant isn’t drowning in paperwork. This can be done with bookkeeping software such as Simply Accounting or by hiring a bookkeeper to keep proper records of everything.

In the business of real estate investing, it’s not what you make, it’s what you keep. You also need to be aware of exactly how much your investment properties are making so you can make any necessary changes to ensure your success. Keep diligent records with the help of your accountant and your cheque book will be happy you did!

Investing in Real Estate – Building The Right Team

After doing some research on different investing ideas, you’ve decided that real estate investing is right for you. No matter how big or small you intend for this investment venture to be, its important to be ready, willing and able to handle everything that comes your way. But how do we do that? By building the proper team of professionals around you to set yourself up for success.

But what type of professionals do you need? We've put together a list of such professionals. Not every one of them is necessary for every investor, but the list is a starting point to make sure your bases are covered.

Realtor

Now this is a pretty obvious one ☺. They’ll be able to help you out with understanding values, demographics, rents, etc. Working with a realtor who either owns rentals themselves or does a good amount of income properties is a huge bonus.

Lawyer

A good real estate lawyer is invaluable. They will make sure your interests are protected in whatever deals your are considering. Good legal advice can be expensive but can save you money in the long run.

Mortgage Broker-Professional

Assuming you will be mortgaging your properties, a good mortgage broker-professional is essential in getting your deals financed. They can give you advice so you can continue to accumulate properties and get the best terms possible.

Accountant

A good accountant is also invaluable. Understanding the best way to hold the real estate, claim expenses, amortize costs, etc. can save you tax dollars. They also have your back should CRA ever audit you.

Property Manager

Don’t have time or the ability to handle your rentals yourself? Finding a good property manager is must-have. They can collect rents, leasing, handle tenant calls and be the general go between the property and the owner. Fees generally range from 5% of rent to one month’s rent per year and up.  Make sure you factor this cost into your budget if you're planning to have the property managed.

Contractor/HandyMan

Not very handy? Then you’ll need to contract out any renovations or general upkeep. When you find good people who don’t cost an arm and a leg, it is important to keep them around and happy. They will make your life much easier in this business.

Bookkeeper

A good bookkeeper can keep track of all your income and expenses related to each property and make sure everything runs smoothly. They can also run regular reports so you understand your profits and can uncover trends (like increasing utility costs), so they can be addressed.

General Maintenance – Grass, Snow, Cleaning

A list of maintenance contacts can go a long way in efficiently operating your property and keeping it safe and attractive to tenants. Be sure to also add these costs to your budget.

This is far from an exhaustive list, but it gives you a general idea about who you should have on your speed dial as a real estate investor. How has your experience been in creating your team?