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  • Sylvia Ho

"Cash Damming"...A Solution to Cash Flow Negative Rental Properties

Cash damming is a technique that uses the cash flows from a rental property to gradually convert personal mortgage debt into more tax-efficient debt to cover the rental property expenses.

This is achieved using the cash flows from the rental income to pay down the non-deductible primary residence mortgage. The equity is then drawn out via a line of credit to pay the rental property’s expenses.

This popular financial method has been used for years by wealthy Canadians to reduce their income taxes and maintain their financial advantage. However, implementing the strategy requires careful consideration and guidance from a mortgage professional and tax specialist.

The rental cash damming approach offers significant benefits, including rapid paydown of the non-deductible primary residence mortgage, increased income tax benefits, and additional savings that can be used to build wealth. Though it takes time and patience to execute, the long-term rewards can be substantial.

To take advantage of rental cash damming, you'll need two separate bank accounts, a re-advanceable home equity line of credit, and a mortgage that allows you to re-borrow your principal as you pay it down. This can be complex, but with proper planning and firsthand knowledge, you can successfully achieve your financial goals.

To learn more about how cash damming works or to connect with Sylvia directly, please visit

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