Owning property to rent it while overseas

[|l|R|l|]

Hello,
Im currently in the pool with a crs 475.

I'm thinking of taking a small loan from the country where I reside, and put a downpayment on a house in Canada to rent it until I travel.

Is it feasible/profitable to take this step and rent the house through an agency/agent while I'm abroad?
I was checking prices in metro areas and it doesn't seem that high and easily affordable with a minimum loan.

 

[steaky]

To do this, you need to find a property manager (a company or a individual) to look after the rental property while you are away. Don't be surprised about ongoing repair and maintenance of the rental property.

Alao, you expect to pay relevant taxes when the rental property increase in value at the time you changed its use from rental to self-occupied.

As a non resident of Canada, your agent in Canada will need to withhold a certain amount of your rental income and remit to the Canadian taxman.

 

[|l|R|l|]

To do this, you need to find a property manager (a company or a individual) to look after the rental property while you are away. Don't be surprised about ongoing repair and maintenance of the rental property.

Alao, you expect to pay relevant taxes when the rental property increase in value at the time you changed its use from rental to self-occupied.

Thanks for ur reply.
1- Any recommended companies/individuals?
2- Doesn't the tenant burden some maintenance charges as well or just me as an owner?
3- Sorry I didnt get the last part. If my property is valued at X in 2021. In 2023, I'll move in to live there myself (not renting), value is now 3X, I'm expected to pay a new tax on the new value? That's separated from the "Foreign Tax" I have to pay in the beginning?

 

[steaky]

Thanks for ur reply.
1- Any recommended companies/individuals?
2- Doesn't the tenant burden some maintenance charges as well or just me as an owner?
3- Sorry I didnt get the last part. If my property is valued at X in 2021. In 2023, I'll move in to live there myself (not renting), value is now 3X, I'm expected to pay a new tax on the new value? That's separated from the "Foreign Tax" I have to pay in the beginning?

1) If Ontario or GTA, I have no idea;
2) Whatever you provided as owner (such as washer), you pay for the maintenance;
3) You pay a certain sum out of the difference between the two. You pay foreign tax at closing but you pay the other one after the year you change the use of the house. For further reading, see below:

https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/tax-return/completing-a-tax-return/personal-income/line-127-capital-gains/principal-residence-other-real-estate/changes-use.html

 

[canuck78]

Would do your research. There are many cases where rental rates are lower than the monthly cost to the owner.

 

[steaky]

Would do your research. There are many cases where rental rates are lower than the monthly cost to the owner.

Research won't do. It's more about the fluctuations in the economy.

 

[canuck78]

Research won't do. It's more about the fluctuations in the economy.

You can determine what the current going rates are an your own monthly costs (mortgage, maintenance costs, insurance, property and land transfer taxes, property management, potentially snow removal/yard work although in some circumstances tenant typically take on the responsibility, etc.) to get an idea whether it even make sense to purchase a home and rent it out. As you pointed out real estate is dependent on the economy and interest rates. You can't assume there will be the insane increases in prices like we have seen in certain regions.

 

[steaky]

You can determine what the current going rates are an your own monthly costs (mortgage, maintenance costs, insurance, property and land transfer taxes, property management, potentially snow removal/yard work although in some circumstances tenant typically take on the responsibility, etc.) to get an idea whether it even make sense to purchase a home and rent it out. As you pointed out real estate is dependent on the economy and interest rates. You can't assume there will be the insane increases in prices like we have seen in certain regions.

The monthly rates and costs also fluctuates (which are all dependent on the economy, situations and interest rates). The current rate or costs can freeze or go up in the following year.

 

[canuck78]

The monthly rates and costs also fluctuates (which are all dependent on the economy, situations and interest rates).

Agree but not dramatically enough that you can't do some calculations with a few different scenarios.