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My landlord was definitely losing money (on a cash flow basis) renting to me in Toronto -- rent did not cover mortgage interest + condo fees + property tax. He
by aianus 7y ago
My landlord was definitely losing money (on a cash flow basis) renting to me in Toronto -- rent did not cover mortgage interest + condo fees + property tax.
He was just gambling on real estate appreciation and using me to cover most of his carrying costs; I would rather gamble on stocks.
- chii 7y agousually investment expenditures can be tax deducted, so your landlord is also using this expense as a way to lower his tax rate. It's effectively transferring income tax into capital gains tax (which presumably is lower and more efficient). By making the rent slightly lower, the landlord is sure to get a renter to cover most of the costs. But if the economic situation declines (or interest rates rises), he can just bump up the rent to cover the increase.