Buying An Investment Property
Selling Your Investment Property
Non-Residents Purchasing Canadian Properties
Important Notes
Quick Links To The Canadian Revenue Agency & Related Forms
Canadian Mortgages

Buying An Investment Property

There are many factors that converge when deciding whether to purchase an investment property. We want to help streamline this process so you can make the choice best suited to your unique needs and goals.

The first step you’ll want to take is determining what your overriding objective is for purchasing investment property. Do you wish to gain a passive monthly income, increase your net worth, begin a college fund for your children or grandchildren or perhaps leave behind a legacy or a combination of the above? Once you’ve determined your objective(s) be sure to take stock of your risk tolerance and the level of commitment you have to realizing your objective.

Next you’ll want to develop an action plan for reaching your objective. This includes issues such as clarifying your current financial position and future financial requirements, calculating your cash flow capabilities and choosing a timeline for implementing this action plan. This is where 20/20 Realty can help through our comprehensive financial profiling system.

All that remains is implementing your action plan. Here’s a quick overview of this four-step process:

	Determine your objective(s), risk tolerance and level of commitment
	Develop an action plan with realistic timelines
	Gather your ‘team of experts’ to help clarify and implement the plan
	Take action and review the plan regularly

Contact us today and see how we can help you develop your real estate investing plan.

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Selling Your Investment Property

Buying investment real estate is a key component to your long-term strategy for gaining financial security, for which the benefits are many. While we encourage our clients to adopt a long-term mind set for their investment properties, we are aware that life circumstances can and do change. Whether you are thinking of selling your investment property to realize capital appreciation in your retirement years, or because of changes in your current financial situation, 20/20 Realty is here to help you make an informed decision.

We encourage you to speak with your Real Estate Advisor before making a firm decision to sell. They can offer insight into issues such as market timing and pricing, and offer you alternatives to selling if capital is what you seek. Your Real Estate Advisor will provide you with access to a strategic network of buyers through our resale program, or if you would like to list your property with a local realtor your Real Estate Advisor can suggest a strategic and trusted realtor in the area for you to work with.

Here are some hints on getting the process started:

	Contact the condominium manager to determine whether your suite is rented or vacant. If it is rented, request the details of the lease, such as how much it is currently rented for and when the current lease will expire.
	Ask the condominium manager for a copy of the policies and procedures regarding the sale of your property and contact information for the resident manager.
	Obtain two or three market evaluations from local realtors who specialize in selling this type of real estate. This is where speaking to your Real Estate Advisor is critical.

We look forward to providing you an opportunity to showcase your unit and offering your fellow Equity Club members new ways of expanding their portfolio of real estate investments.

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Non-Residents Purchasing Canadian Properties

If you are a non-resident of Canada purchasing Canadian revenue producing properties, you will be required to pay tax in Canada on this income. Specifically, a 25 percent non-resident tax must be paid on the gross rent a tenant pays; however, when you use a professional property manager, you are afforded some valuable options:

• The property manager will, by law, withhold 25 percent of the gross rental revenue at source to be remitted to the Canadian Revenue Agency. Then on or before March 31 of the following year, the property manager issues an NR4 form and you then have the right to file a Canadian Tax Return. The tax return is due June 30 and enables you to claim expenses against that income and potentially request a refund.

• You may elect to sign and submit an NR6 form in conjunction with the property manager before December 31 of each year; and once accepted the amount of non-resident tax withheld decreases to 25 percent of the gross rental revenue less any allowable expenses.

Important notes:

• By signing an NR6 form, you are undertaking to file an annual Canadian Tax Return and a T776 Statement of Real Estate Rentals form.

• Many countries, such at the U.S., have tax treaties with Canada that prevent you from being taxed in both Canada and your home country. Be sure to contact a tax accountant in your country for more information.

• For the first year of ownership, the property manager is required to withhold 25 percent of the gross rental revenue until such time as the NR6 form can be filed with the Canadian Revenue Service at the end of the year.

• The tax year corresponds to the calendar year for individuals, while the tax year for corporations, estates and trusts is the fiscal yearend.

• Both of the above options require an NR4 Summary and NR4 Supplementary to be filed by the property manager on or before March 31, even if no tax was required to be withheld.

• You should always consult an accountant regarding your specific situation and we can refer you to accountants that can assist with cross border real estate ownership.

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Quick Links to the Canadian Revenue Agency and related forms:  

Canadian Revenue Agency (very helpful for information about the tax implications of owning revenue producing real estate in Canada)

NR6 – Undertaking to File an Income Tax Return by a Non-Resident Receiving Rent from Real Property or Receiving a Timber Royalty

T776 – Statement of Real Estate Rentals

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Canadian Mortgages

There is a maximum mortgage amortization of 25 years in Canada; however, banks offer various terms that allow you to take advantage of the changing interest rate environment. These options allow for both flexibility and savings.

Your personal Real Estate Advisor will discuss these options and recommend the most appropriate mortgage terms to suit your particular needs and help avoid any penalties due to early pay out of the mortgage. We are here to assist you in coordinating all the necessary financing and bank accounts needed in Canada for your investment property purchase. You will be kept fully informed through regular statements from your financial institution and property manager.

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