Pros and Cons of Buying Real Estate in a Corporation vs Personally

In this episode of the Wisdom Lifestyle Money Show, host Scott Dillingham addresses a listener's request to explore the advantages and disadvantages of purchasing investment properties through a corporation versus in one's personal name. Drawing from his experience as a mortgage expert at LendCity, Scott explains key benefits like keeping corporate mortgages off personal credit reports, allowing investors to qualify for more loans without impacting their personal debt ratios. He highlights how some residential lenders ignore corporate holdings entirely, enabling repeated "resets" for further acquisitions. Additionally, corporations provide enhanced liability protection, shielding personal assets from potential lawsuits related to the property.

Scott also covers the drawbacks, including higher interest rates due to fewer lenders offering corporate mortgages post-COVID, as many shifted toward commercial products with added fees. He notes challenges with multiple directors, requiring all to co-sign, and emphasizes consulting accountants for tax implications, which can vary based on income levels. As an alternative, Scott discusses bare trust agreements, which allow closing personally before transferring to a corporation for tax purposes, though they offer no liability shield and may complicate future refinances. As of November 2025, bare trusts remain a viable option, but recent federal budget updates have exempted them from new T3 reporting requirements for the 2025 tax year, providing temporary relief from enhanced disclosure rules.

This episode offers practical guidance for real estate investors in Canada, stressing the importance of personalized advice from professionals. Scott invites listeners to join LendCity's investor hub for upcoming webinars on this topic and encourages feedback for future episodes, blending mortgage insights with strategic tips to help build wealth through informed decisions.