A holding company or Holdco for short is a corporation whose sole purpose is to hold assets.  Generally, there are two benefits and or reasons why people want to hold assets in a corporation.  Firstly, there is limited liability.  So if you’re sued as the landlord a corporate structure can help protect your personal assets.  Secondly, there are income tax benefits.  You can take excess cash from the company in the form of dividends, which […]

Real Estate Investing in a Holdco: Pros and Cons

Conventional wisdom is that diversification in a portfolio is a good thing, and is a common mantra according to modern portfolio theory.  Financial advisors will often preach the benefits of having a “well diversified portfolio”.  That said many famous investors such as Warren Buffet and George Soros have created wealth through concentrated strategies not diversified strategies, and their approach has been supported by several empirical studies.  According to Buffet:   “Diversification is something that people […]

Is Portfolio Diversification a good thing?

In 2014 banks became required to disclose general information on collateral mortgages on their website.  This was due to confusion on behalf of consumers as well as widespread negative media coverage.  So what exactly is the difference between collateral and conventional mortgages?  Below is what you need to know. With a conventional mortgage the amount of the actual mortgage is the same as the amount that is registered on your home.  Therefore, if you purchased […]

Conventional Vs Collateral Mortgages: What you need to know.

Value investing is the concept of purchasing investments at a price that is below their intrinsic value.  Modern analysis involves projecting free cash flow, discounting cash flows by the risk free rate to determine the value of the company, and then dividing the value of the company by the number of outstanding shares to determine what the price of a share “should be”.  Ideally the price paid for the stock should be less than this […]

Be a Value Investor

Fixed income investments can be a great way to provide a floor for you investment portfolio and to preserve your capital.  One popular way of investing in fixed income is through the bond market.  The size of the bond market in Canada as of December 2014 was $2.4 trillion (face value) and to give some perspective the size of the TSX at that time was $2.511 trillion (market cap).  Though the bond market is very […]

The Canadian Bond Market and Principles of Bond Investing

In Part 1 of this article we discussed the pros and cons of hiring a general contractor. For those who would rather be their own project manager this article discusses the pros and cons of going that route: Pros Greater control over the job site and the work that is done. Essentially you are the boss. You can directly manage the workflow to suit your own needs. You can either accelerate or slow down the […]

To use or not to use a General Contractor Part ...

If you are doing a property re-model you’ll need to decide whether you want to use a general contractor to manage your project or to take on the role of project manager yourself. In order to assist in your decision below are some pros and cons of using a Good General Contractor. Pros The contractor will have the experience and skill set to pre-empt issues and reduce rework. They can efficiently handle the day to […]

To Use or Not to Use a General Contractor- Part ...

The majority of tenant problems can actually be eliminated during the screening process. The very first step is pre-screening when you get an initial phone call or email inquiry to rent your property.  You can save yourself valuable time and energy by pre-screening before doing viewings. Below are 8 valuable questions you should ask before setting up a viewing: 1. What is your Reason for Moving? Though people will often filter their responses this question […]

8 Tenant Pre-Screening Questions

While having good credit is not necessary to invest in Real Estate it certainly makes it a lot easier. Your credit report is maintained by credit reporting agencies of which there are two in Canada, Transunion and Equifax. What everyone should know is that they have the right to look at their credit report for free, but if they are looking for their credit score a small fee will apply. The four sections to your […]

Credit Fundamentals for Investors

In order to keep up the value of your property and keep your tenants satisfied investment in your rental property will be required time to time. Below are 7 hot tips that will help maximize property value and rents. Update hardware like handles, door knobs, and kitchen cabinet knobs. These are relatively cheap improvements that are visually appealing. Combine this with painting your old kitchen cabinets and a countertop upgrade and that old kitchen could […]

7 Low Cost Upgrades for Maximizing Rental Income