Business - PUT YOURSELF AHEAD Invest in rental property WHILE MOST people think of reel estate only in terms. of buying their own home, investing in a rental property can put you that much further ahead. You can start out small, by buy- ing a house and renting out either the basement suite — or the entire upper floor, if you're single and don't need much space. Or vou might) purchase a duplex or fourplex, and live in one of its suites. EE TS money matters by Lisa Smedman EE If you have your own home already, you might opt for buying another house, a cabin, an apart- ment, or a condominium to rent out. Or, if you are a sophisticated investor with lots of capital to play with, you might move up into the big leagues by buying an apart- ment block. TAX ADVANTAGES Owning a rental property has several advantages, especially at income tax time. The first of these is the ‘lifetime exemption’ on capital gains (the profit made ‘through buying and selling, for example, real estate. By 1990, you will be able to make a cumulative profit of as , Much as $500,000 in capital gains before you have to pay a penny of tax on this property. Over and above the lifetime exemption, only one half of your capital gains are taxed, (The lifetime exemption applies only to properties held in an indi- vidual’s name — not to properties held by a corporation.) A. profitable investment in’ a rental property will see you earning revenue from this property as well, But even if you ‘lose'’ money (i.e: the rent doesn’t cover the mortgage and upkeep) you don’t really lose. By having a renter pay part of your monthly mortgage bill, you are that much further ahead of someone who does not rent out their property. INVESTMENT BONUS Best of all, because the property you rent out was bought as an “investment,’' the mortgage inter- est paid on it is tax deductible. (If only a portion of the property is used for rentals, only a portion of your interest is deductible.) John Wettle, a North Shore re- altor with the Sutton group, specializes in the selling of rental properties. He says that an annual return of 10 per cent during the first few years of owning a rental property is considered a good return by the owners of large apartment suites. Most investors will look at what the banks are paying on a term deposit, and will compare that fig- ure to the anticipated return from a rental building. They'll use that rate as a criteria,”’ says Wettle. APARTMENT EXPENSES To make a good profit, the ex- penses of running an apartment building should not add up to more than one-third of the gross rental income from the building. After subtracting the cost ef the mortgage, an apartment owner who ends up with a 10 per cent return is doing well. The lower the mortgage interest rate, the higher the rental profits will be. When buying a rental property, location is extremely impertant. Location will determine both the amount of rent you can charge, THE NSEDC PROVIDES A VARIETY OF SERVICES TO THOSE ACTIVELY PLANNING A NEW BUSINESS VENTURE. OUR SEMINARS, WORKSHOPS, AND ADVICE ARE DESIGNED TO HELP YOU SUCCEED. THIS FALL THE FOLLOWING SMALL GROUP SEMINARS ARE BEING HELD: Insuring a Small Business Franchising Incorporating vs Partnerships vs Proprietorships Trade Marks, Patents. Copyrights. and Industrial Design Arranging a Commercial Lease Shareholder and Partnership Agreements ee) and the type of renter you will get. Location will also determine how quickly your property will ap- preciate in value, AVERAGE REVENUE Currently, the average revenue generating apartment building on the North Shore sells for anywhere from $35,000 to $60,000 per suite. in comparison, those in New Westminster, Surrey or the Fraser Valley can sell for as low as $30,000 per unit.” Bul apartment complexes at a low price are hard to find. Many owners are putting off selling until the capital gains rules are fully Dinner for Two courtesy of Currie McPhail Present ttus ad when you purchase a new of used cat er tuck and ginner’s on Curne Paget 687-1985 73680 BBY) Frrsctctrerns 987-5231 845 Marine Dr., North Van 21 - Sunday, August 31, phased in. Others are hanging on with both fists to a good invest- ment. “You're who are dealing shrewd,"* with people says Wettle. "The a Jar 1986 - North Shore News ‘They are above average investors. You can use all the sales talk you have, but if he knows he’s got something good, he’s not going to sell,”’ HF Announcement| The new location for our RICHMOND store will be #218-4451 No. 3 Road Sept. 1/86 278-8556 Now we have 3 locations to serve you better! PLEASE DROP IN TO SEE OUR GRAND OPENING SALE AT ALL 3 LOCATIONS OPEN 7 DAYS A WEEK THE GINGER JAR 1480 Marine Dr, NV 988-7328 WICKER WAREHOUSE 1229 Welch St, NV 988-4108 The North Shore Neighbourhood House is pleased to announce the opening of +) CURL EM Sy CHILD-MINDING \ An Interesting and Stimulating Environment for Preschool Children Now Open ¢ 9:30-6pm © rates $3 per hour © Located in the Mall on the _ Upper Level above the Grand Concourse Child-Minding available for children 18 months - 6 years Buying/Selling a Small panes aR Financing and verlute i aie re regen y- b Paws. Opening ale Permit fed Taxation he in * Employee-b@fiefjts ei e ike Business Researchiig’Ma ket Information — where to go, how to look. Experienced and Qualified Child Care Staff A United Way Agency Reservations Accepted 7 THE SEMINARS WILL BE HELD IN THE EVENINGS AT THE R CENTRE. ENROLLMENT IS LIMITED AND PRE-REGISTRA- # TION IS REQUIRED. THE FEE iS $10.00 PER SEMINAR — ENROLL FOR AS MANY AS YOU WISH. : For further information drop by or call us at 984-2004 987-1326 ert Centres