In today’s Finance Minute, one of the common questions I get from my real estate investors is this:  Should I pay off my rental property mortgage first?  My favourite advice is pay off your personal mortgage fast and your rental property mortgage last.

Why is this important?  Because of tax reasons.  You cannot write off or claim the interest that you pay on your personal mortgage as an expense from your personal tax return.  And you can do so on your mortgage on your rental property.  For example, on a $300,000 mortgage, the interest that you pay may be around $9,000.  That interest cost cannot be deducted off your tax return if the mortgage is on your personal mortgage.  But if that mortgage was for a rental property you can write off the whole thing from your tax return!  You want to write off as much interest cost from your tax return, so you owe less in taxes.

Of course, you’ll want to talk to your accountant to make sure you are taking advantage of other potential savings that you can when you own rental properties.  If you need clarification, please send me a private message and I would be happy to help you.

Thanks for watching, please like and share if we made a difference to you.

DISCLAIMER: The information in this post is solely advisory, and should not be substituted for legal, financial or tax advice. Any and all decisions and actions must be done through the advice and counsel of a qualified attorney, financial advisor and/or CPA. We cannot be held responsible for actions you may take without proper financial, legal or tax advice.

Karista Events & Workshops

We offer FREE educational events and workshops for First-time Home Buyers, Real Estate Investors, and a lot more!

Although we currently don’t have any scheduled webinars, we have an exciting opportunity for you to access our on-demand webinar recording. To get your hands on this valuable resource, we invite you to book a Quick Call with one of our Mortgage Strategy Managers. They will be delighted to assist you. Simply click here to schedule your call.

What: FREE Real Estate Investing Workshop
When: May 11, 2024 (Saturday)
Time: 2:00 PM to 4:00 PM Pacific Time
Where: Sandman Signature Langley Hotel at 8828 201 St., Langley, BC V2Y 0C8

Click Here to Register

What: FREE First-time Homebuyer Workshop (Online)
When: TBC
Time: 2:00 PM to 4:00 PM Pacific Time

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