Pros and Cons Of Buying A Rental Property In A Corp Or Personal Name
In this episode, the host discusses the pros and cons of buying rental properties in a corporation or personally. The major benefits of buying in a corporation include mortgages not showing up on personal credit bureaus and extra liability protection. However, there are also drawbacks, such as properties in a corporation having higher interest rates and limited lender options. The host also mentions the option of using a bare trust agreement to close personally, but have the property considered in the corporation for tax purposes. It is important to consult a lender and accountant to determine the best approach.
Takeaways
- (00:00) - Introduction and Show Overview
- (03:58) - Major Pros of Buying in a Corporation
- (05:51) - Impact of Buying in a Corporation on Interest Rates
- (06:45) - Considerations for Directors and Co-Owners
- (08:40) - Bare Trust Agreement and Lender Complications
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Takeaways
- Buying rental properties in a corporation can provide benefits such as mortgages not showing up on personal credit bureaus and extra liability protection.
- However, there are drawbacks to buying in a corporation, including higher interest rates and limited lender options.
- Using a bare trust agreement can allow for personal closing, but have the property considered in the corporation for tax purposes.
- Consulting with a lender and accountant is crucial to determine the best approach for buying rental properties.
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