How much debt do you have?

mattfca said:
mortgage interest is tax deductible? hmm, I'll have to look into this in canada. I never would of thought it would be.
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Mortgage interest itself isn't tax deductible, but if you leverage your equity on your property and invest it, then the equity portion you're borrowing is tax deductible.

So if your mortgage is $300K and your property is assessed @ $450K, you can borrow and invest $100K of that and write off the interest costs on that $100K (actually I think most Canadian banks will only let you borrow up to 80% of your property's value, but I used those numbers above for simplicity sake).

Someone previously mentioned it best, "good debt" vs. "bad debt". Good debt is what can potentially earn you money (i.e. hopefully earns more than your interest costs), bad debt costs you out of pocket. People always freak out about leveraged investments and think it's crazy risky. It's no more crazy than taking equity out of your house, and buying another property with it. Except with buying another property, the income you receive from rentals etc is counted as taxable income and you can't write off the interest costs. For me, the only time I would invest in another property vs. an investment is when the property is at rock bottom and supposed to climb. But buying a rental property here in Vancouver is stupid IMO, prices are at an all time high and if that bubble bursts, you're fucked.

My opinion above is only for Vancouver as there are many other places where real estate investing is the way to go.
 


Spliffic said:
Mortgage interest itself isn't tax deductible, but if you leverage your equity on your property and invest it, then the equity portion you're borrowing is tax deductible.

So if your mortgage is $300K and your property is assessed @ $450K, you can borrow and invest $100K of that and write off the interest costs on that $100K (actually I think most Canadian banks will only let you borrow up to 80% of your property's value, but I used those numbers above for simplicity sake).

Someone previously mentioned it best, "good debt" vs. "bad debt". Good debt is what can potentially earn you money (i.e. hopefully earns more than your interest costs), bad debt costs you out of pocket. People always freak out about leveraged investments and think it's crazy risky. It's no more crazy than taking equity out of your house, and buying another property with it. Except with buying another property, the income you receive from rentals etc is counted as taxable income and you can't write off the interest costs. For me, the only time I would invest in another property vs. an investment is when the property is at rock bottom and supposed to climb. But buying a rental property here in Vancouver is stupid IMO, prices are at an all time high and if that bubble bursts, you're fucked.

My opinion above is only for Vancouver as there are many other places where real estate investing is the way to go.
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bingo! good shit there.

Torontos pretty much the same regarding the rental units... not worth it unless you are putting down BIG downpayment. Might as well use on something else, or look elsewheres...
 
papajohn56 said:
No...mortgage interest is tax deductible in the US regardless if you use a home office or not. A home office just makes a portion of the entire bill tax deductible.
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Yeah, sorry I was talking about Canada there. Matt is in same area as me. Wish we were able to write part of it off for none business activity do not think you are allowed to do that up here in Canada.
 
Spliffic said:
Mortgage interest itself isn't tax deductible, but if you leverage your equity on your property and invest it, then the equity portion you're borrowing is tax deductible.

So if your mortgage is $300K and your property is assessed @ $450K, you can borrow and invest $100K of that and write off the interest costs on that $100K (actually I think most Canadian banks will only let you borrow up to 80% of your property's value, but I used those numbers above for simplicity sake).

Someone previously mentioned it best, "good debt" vs. "bad debt". Good debt is what can potentially earn you money (i.e. hopefully earns more than your interest costs), bad debt costs you out of pocket. People always freak out about leveraged investments and think it's crazy risky. It's no more crazy than taking equity out of your house, and buying another property with it. Except with buying another property, the income you receive from rentals etc is counted as taxable income and you can't write off the interest costs. For me, the only time I would invest in another property vs. an investment is when the property is at rock bottom and supposed to climb. But buying a rental property here in Vancouver is stupid IMO, prices are at an all time high and if that bubble bursts, you're fucked.

My opinion above is only for Vancouver as there are many other places where real estate investing is the way to go.
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I agree to a point I think Vancouver still has pockets to invest in. We are different then other parts of Canada and USA. We dore nly a manufacturer's, we are a commodities market, which is why we are just now seeing some of the recession hit. Even now it is hard to see unless you know what to look for.

I mean I brought my condo bout 8 months before the recession hit. I said it was undervalued for 40k. The rest of my floor ended up selling too 2 4 and 6 months later for 40k -50- and 60k more then I paid for mine and mine was the best on the floor. The recession hit and the prices in my hood for condo's did not drop. Some houses went down 10-15%

Vancouver is dam expensive now. The only reason our bubble will burst like it did everywhere else is if there is a major bust in china/asia. Vancouver has the Azian money buying property and keeping us afloat.

Houseing Prices will keep going up is my opinion. I expect a big jump if the price of gas goes up 40 cents for us. Because you have all these ppl that left the city for the burbs at the start of the boom for cheap houses when the price of gas was 75 cents now it is 1.20.

This sucks cause I want a house and the area I want I would be looking at 700k-1.5mil.
 
Unarmed Gunman said:
Actually, a charge card and revolving credit are two completely different things. Revolving credit (ie a credit card like Visa, MC, Discover etc) you can carry a balance from month to month whereas a charge card (ie American Express) is paid off at the end of the month, and therefore isn't considered revolving credit.
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No.

You get charged interest on AMEX cards that aren't paid in full in 30 days.
 
You get charged a fee, not interest, and if you do not pay in 2 months at all... It hits your credit report.

Have fun with that.

Read your cards terms that they send you.
 
lukep said:
If you declare Chapter 7 bankruptcy, (the most popular kind) you have to give ALL of your property to the bankruptcy court. Yes, even the monitor you are staring at now. Everything that can be sold! And yes, they do have you investigated harshly to ensure they've found it all. The sherriff goes through your undies and everything. Skwoo dat.
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In the past few years dealing with short sales of homes. I have seen a lot of bankruptcies and worked through them with clients. None of the above ever occurred. They filed. Went to a hearing. Debt discharged. Time and time again. They can get a credit card or car loan the next day.
 
TFLNetwork said:
You get charged a fee, not interest, and if you do not pay in 2 months at all... It hits your credit report.

Have fun with that.

Read your cards terms that they send you.
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Read what's on their site.

Proof is in the pudding.

Don't be upset with me, Daisy.
 
Know the feeling of debt pressure and that of no debt. Missing how a lot of people think no debt is always the best choice.

Currently about 30k on a property 4q 2010 appraised at 290k bought on short sale. Interest rate = keep the note for awhile.

Don't get FTC-Hater hating on cash for rentals. Missing the blanket logic. Different latitude from above property, picked up a distressed sale in Bahama Villiage KW for .40 on the dollar cause could make it happen at that moment. Discounted purchase would not have happened if went thru slower channels.

CC balances 0 - 15k. If campaigns jammin got no problem with carrying n% rate balance if return is n x y for a month or so. I'm not ballin but if I can put $1 in a magic box and get $2 out the other side I will borrow at 12% all day long.

Choosing no debt can be an admirable trait. Sometimes it may not be something to brag about.
 
REIMktg said:
In the past few years dealing with short sales of homes. I have seen a lot of bankruptcies and worked through them with clients. None of the above ever occurred. They filed. Went to a hearing. Debt discharged. Time and time again. They can get a credit card or car loan the next day.
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Duhh, You live in CA... Doesn't count. Your entire state is so bankrupt that the sheriff would have to start at the governor's mansion first!

When _I_ lived in CA it wasn't like that yet though. They still had judges that weren't afraid of being evicted by the banks themselves...
 
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