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Real Estate Investments: Buying Property Under a Corporation Name 2018-05-04 05:11:37 Akal Mortgages Real Estate Investments: Buying Property Under a Corporation Name

real estate investing 261Are you looking to generate more income? Buying property can help you to achieve this goal. One of the greatest benefits to real estate investments is that they help you to increase your  income, not to mention that the actual property value can increase over time. 


Experienced Investors: Your Investment Portfolio

If you are a serious investor, you want to ensure that your investment portfolio is diverse. This will help you to balance your risk levels so that you can invest more confidently. Investing in real estate is a great way to diversify your portfolio.

A small down payment or capital may be needed in order to purchase a new property, but the return on investment (ROI) will be well worth it. Collecting rent from tenant, minus your expenses, is how the additional monthly income will be calculated.

You want to ensure that your investment result in a positive cash flow. As such, you’ll require help from an experienced mortgage professional. You mortgage broker will analyze your investment, income and expenses to ensure that your cash flow will move in the right direction.

With each mortgage payment you make, you will build equity which increase the overall value. Since mortgage rates are low at this time, and many tenant looking for new rentals in the Mississauga and Brampton areas, it’s a great time to invest in real estate.

However, even if you are one of those people that just has a hard time saving, property investing can help change that. You can use an investment property to pay down the principal amount of your mortgage, reduce your debt and build equity. You would see your savings following the sale of your property, therefore forcing yourself to save.

Buying Investment Properties Under Corporation Names

As a real estate investor, AKAL Mortgages strongly encourages you to use a corporation name when buying your investment property. Here are a few reasons why this is encouraged:

  • More Tax Benefits: By using a corporation name you can take a sum of money paid regularly as taxable income, but receive a much lower tax rate.
  • Limited Personal Liability: If you should ever be sued by an individual who was injured on your property, the lawsuit itself would be against the corporation and not you personally. Therefore, it actually protects you and your personal assets.

Reap the benefits and protect yourself personally buy buying under a corporation name.

What You Need to Know about Personal Guarantees?

You should be aware that as the owner of the corporation, you will be required to make personal guarantees. What this means in simple terms is, that even though the property title will be under the corporation name, you as the borrower provides a personal guarantee of the loan. If you default on the loan, than lenders can take action against both the corporation and you for recover default expenses and full repayment.

 Personal guarantees may not be need if:

  • The property has been commercially underwritten
  • The corporation is more than three years old and able to provide strong corporate tax filings and financial statements
  • The corporation’s base has high assets
  • The corporation’s net profit is consistent and so is its positive cash flow

To figure out the best investment solutions for you and how to successfully buy a property under a corporation name, contact your neighborhood mortgage broker to discuss your investment portfolio or goals today.

When we say Yes, we stand behind our promise!


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