Real estate investors often ask about the number of properties before incorporating their real estate business makes sense. Wrong question. Instead, I say it’s time to think about this differently.
Video Transcript: Number of properties before incorporating
A common question. How many properties should I have before I incorporate?
I’m George Dube, saving the world from tax one bow tie at a time.
And here to me, it’s not so much whether there’s a threshold or milestone that should be reached before considering the incorporation or number of properties.
Number of properties to incorporate – think value
I like to think about dollar values as clearly buying a property in downtown Vancouver or Toronto is going to be very, very different from a price perspective in other communities in Canada.
While it’s not written in the Income Tax Act anywhere, as a real, real, real rough rule of thumb I like to be giving thought to if I’m going to be acquiring real estate that’s going to have a value of roughly one and a half million dollars and I’ll be acquiring that over the next three-ish years, I think then we should be considering that incorporation.
Thanks for watching, and again, it’s summary in nature, there’s a lot more to it that will also be dependent on your particular situation.
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Resources
For additional resources related to incorporating your real estate business, and the number of properties before incorporating:
Talking real estate with George and Peter: When should I incorporate?
When and how should you incorporate your real estate business?
Back to: Buying real estate in a corporation: Ultimate guide for Canadian real estate investors
More questions?
Still have questions? I want to help you Do Wonderful Things™ with your real estate investments, so please contact me today.
Remember – circumstances are unique! This information is summary in nature. Seek out advice from your tax advisor about your specific situation.
