Real Estate Investing: Did I mess up by renting out my property too early? |
- Did I mess up by renting out my property too early?
- I was 30 at the time,
- Orlando, FL First time buyer might get new home next year to rent out to tenants and have a property manager or master tenant sublease to other tenants.
- LLC questions
- Tenants with affected credit score
- What happens when ur income is negative after taking the depreciation deduction ?
- Risky to sign a new tenant right now? Sell rental property instead?
- My spouse and I are considering to make an out of state real estate investment.
- Questions about real estate joint venture.
- handling income and expenses on first owner occupied multi
- Cold call/texting advice?
- Business Line?
- First time buyer, indecisive about the right strategy (Central Florida)
- Which one is a better investment - smaller townhouse or a larger one?
- Buying an investment property while waiting for new primary home to be built
- Primary residence w/ adjoined rental unit. What tax or liability considerations should I be aware of?
- Buying a "single-family house" that is actually 2 completely separate SFHs on 1 parcel?
- LLCs, A few basic questions
- 1031 % question
- Is this rental property a good investment?
- Looking for input/advice on putting part of the proceeds of a rental home into a DST1031.
- Looking to bid at a tax lien auction
- How do you use yield on cost?
| Did I mess up by renting out my property too early? Posted: 27 Feb 2021 07:56 PM PST I bought my property in April 2019, and lived in it until end January 2021, therefore it has only been used as my primary residence for 21 months. I am currently renting it out for a year lease, and I plan on renting it out again for another year. After the second year term has ended, I plan on making the property my primary residence for three months, so I am in the "2 out of 5 years" category. I plan to sell by April 2024. I am reading that if I had lived in it for the entire two years prior to renting it out for 2 years, and selling it in 5th year... I would be fully exempt from capital gains. But because I am moving back, I am no longer fully exempt. How true is this statement? Did I do myself a disservice putting the property on the market this soon? Thank you Where I am reading this: https://www.merriman.com/wealth-preservation/planning-on-moving-back-into-your-rental-in-the-future-read-this-first/ Section:
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| Posted: 27 Feb 2021 06:09 AM PST I was 30 at the time, (now I am applying for medicare) but the neighbor asked me to help him roof his rental cabin. I had 4-5 kids by then and money was a thing of stories, not actually obtainable, dumpster diving and steel sticking out of the threads of my car tires was a more an apt description of our financial life. Saving money was like pouring water into a tank with a huge hole in it! If I did actually squirrel away 6-8 K in a year I owed it out in taxes in April! I worked so hard, one evening my wife put her hand on me just as I was dozing off and my nerves sent me to the ceiling like spiderman! Anyway I looked at that cabin I was roofing, and all the other cabins there and remembered all the old farts that I knew who had rentals, and how they lit up when speaking of the cash flow. I decided right then to get some. I reasoned it would be considerably easier to have somebody pay me each month than me pay somebody. I later found out that collecting rent has its own set of troubles as well, take February for instance, it being a short month, I barely have collected all the tens of thousands of rent, and now have to do it again! It is tough, you get all that money and then have to find a place to put it! (sarcasm alert) Anyway, my encouragement to you younger people.... it can be done and done in a way that you stay married and have a family that doesn't hate you when it is over! (feel free to comment or tell us your story) [link] [comments] |
| Posted: 27 Feb 2021 08:26 PM PST Yeah so my plan is to live elsewhere while I get a property leased to a master tenant or adminstered by a property manager but I don't know which option is mre affordable. Also, the houses in Orlando look crazy expensive for a first time home (Lookimg for a 4-bedroom home). I would like to get a 170k home but I feel like I might have to go to Kissimmee or Clermont for that. After that I will get another home, then another, etc. And it should be easier to pay off the next homes collecting rent from the previous ones already paid off in theory. The thing is I'm not sure if that's possible. I feel like I am being a little unrealistic with my expectations. What is your experience as a first time buyer looking to rent out your property? [link] [comments] |
| Posted: 27 Feb 2021 08:06 PM PST I'm still writing offers for properties as I see them. The market has been really expensive, as it has been, so in the mean time I've been setting up my LLC. Ultimately I'd like to own a handful of properties in my current market. My plan was to set up an LLC for each property and then have them all under one holding company. I first wanted to know if this makes sense financially and secondly how to effectively name the LLCs. If anyone has experience with this I'd appreciate any insight. [link] [comments] |
| Tenants with affected credit score Posted: 27 Feb 2021 03:21 PM PST I am planning to rent my property to a tenant whose credit history got hit because of closure of his business during covid. He has other business and they are running well and has enough money from the sale of his home. He is willing to pay the total rent upfront. What are the risks? Anything that I should be aware of? Any advice would be helpful! [link] [comments] |
| What happens when ur income is negative after taking the depreciation deduction ? Posted: 27 Feb 2021 07:57 PM PST Hi, Assuming I have rental income of 10k but my depreciation off my cost basis is 15k a year, and that I make 100k a year at my day job, does that mean my taxable income would be 95k? [link] [comments] |
| Risky to sign a new tenant right now? Sell rental property instead? Posted: 27 Feb 2021 09:36 PM PST Moving the family out of state. Selling our primary SFH and contemplating selling our rental townhome. Please give me your 2c! We have rented it out for almost 8 years with minimal invested in the property, but are worried our luck could be wearing thin, 5 tenants over that time have been mostly good. The unit is also starting to show moderate wear and will need some cosmetic investment soon if we don't sell (maybe 5-8k). The townhome is worth ~180k+, owe ~70k, rent is $1600/mo, profit of $400/mo plus what is paid towards principal. Would pocket roughly 100k if we sold. Thought about 1031ing into another rental property in our new home state but with the market the way it is that looks impossible, we're having enough difficulty landing a primary home. If we find a new tenant am I at higher risk due to the recently extended eviction moratorium? We can't really afford to cover mortgage/tax/hoa for 6-12mo+. What is stopping someone from playing nice knowing they can take advantage of the current situation? Managing the property remotely will be a new challenge also, even with a good local handyman resource. Not interested in a property manager due to cost. With this (limited) information what would you do? Hold and risk a new tenant? Take the money and reinvest by way of maxing a new IRA / existing 401k contribution over the next few years? Put it all in an index fund and wait for real estate to possibly "cool" and buy another rental property in our new home state? Any wisdom is appreciated! [link] [comments] |
| My spouse and I are considering to make an out of state real estate investment. Posted: 27 Feb 2021 07:29 PM PST We live in FL and it's a huge sellers market market. The prices are skyrocketing. We both agreed to travel to a good prospecting area outside of state, live there for 4-6 weeks weeks while actively searching for good rental property to buy. The goal is the have property management company to handle the property. I am looking for recommendation from redditors for local areas that they would recommend for further research. Also, if there are solid tools that you use to research your next real estate investment I would love to hear about them. [link] [comments] |
| Questions about real estate joint venture. Posted: 27 Feb 2021 05:13 PM PST Me and other investors are partnering up to start investing in real estate. We will be setting up a holding LLC and an LLC for each property. Can others in similar situations share how they operate the holding LLC? How do you recommend we finance our first property (100K)? Should all members co-sign on a conventional loan? Should only one member apply for the loan? [link] [comments] |
| handling income and expenses on first owner occupied multi Posted: 27 Feb 2021 05:39 PM PST I closed on my first property, a two family, in october and have been owner occupied since. I talked to my tax guy on Friday and he said there are a million ways to deal with the banking and for now do what I am comfortable with so I was just curious how others handle it. I am new and dont have much of a network so I thought this would be an okay place to start. Downstairs unit was move in ready and would pull in more rent so I did some paint/light fixtures, listed it for december and had a tenant in for January 1. Upstairs where I am living needs some work, outdated electrical, im installing oil heat since its on electric, just needs a general update. I opened an account, checking and savings actually and deposit rent from my tenant and basically pay myself what I expect to list the upstairs for when I move out. my own rent covers the balance of my mortgage, my utilities and then some. each month i move money over to savings for occupancy, maintenance and unpredictables on both units and keep the rest as padding for the checking for now. he mentioned an LLC down the line but I am still waiting to see how this year goes, the goal was to purchase 2-3 more properties but with the way the market is im not sure thats my expectation anymore. [link] [comments] |
| Posted: 27 Feb 2021 11:04 PM PST Hi! I'm rather new to real estate investing and I've just recently started investing out of state (closing on my first house soon!). I want to do both out of state & in-state with my primary in-state goals being to flip while out of state is passive income (since I live in a HCOL area). I was driving around the other week and found a rundown property in an area that is being affected by the pandemic pretty hard (more working class area that are having a lot of sales now). I did some research and found the property owner's number and the property is not their primary residence. I'd love some suggestions on how to approach the seller about the property! Have any of you tried cold texting? Are folks more responsive to texts rather than calls when it comes to this? (Their number shows up as blue text so I know the number isn't disconnected) [link] [comments] |
| Posted: 27 Feb 2021 04:37 PM PST What are people using for a business line nowadays? Drop your favorite services/tools/apps below. I'm going from 8 -> 40+ units next month and need a dedicated line, preferably within an app that could ring myself and 2 other partners, anytime, on our own phones. Anyone have this going on? TIA [link] [comments] |
| First time buyer, indecisive about the right strategy (Central Florida) Posted: 27 Feb 2021 09:26 AM PST I'm a first time home buyer. Due to years of chronic un/under employment, I've never been in a position to even consider buying a home. I've now been in a good paying job for the past 3 1/2 years, half of which I spent paying off all my debt and the other half saving up for a house down payment. Financially, I'm ready. Main problem is too many options and inability to pick one strategy. I live in the Orlando area, which I love for its affordability but I absolutely hate the Florida climate. My goal is to buy a home now since my lease is up in a couple months, live in it for a year or two while I figure out where I want to go next, improve it during that time if I need to, then rent it out when I move on to wherever next is. Option 1: Short Term Vacation homes near Disneyworld. These homes are surprisingly affordable, given they are often fully furnished and being sold as turnkey opportunities for vacation rentals. Major downside is that the communities themselves have little to offer outside their clubhouse amenities, and about a 45 minute drive to the neighborhoods that I would want to frequent in the evenings or weekends. And, because these communities are almost entirely short term rentals, they have a reputation for being excessively loud because everyone is on vacation and parties until early morning hours. There's a good chance I would be the only long-term resident among many vacationers. All of them have a pool. Option 2: Established Residential Neighborhood. These homes are much closer to dining, shopping, and pretty much everything, and are in nice developed neighborhoods. The style is usually dated and not super attractive (I have yet to see one that does not have a popcorn ceiling). But, it's the kind of place where people are happy to raise a family, good schools, etc. I don't have a family, but given these neighborhoods do not allow short-term rentals, that would be important since my only option after leaving Florida would be to rent it out long-term. These homes often include a pool. Option 3: New Construction Developments. Orlando is rapidly growing, and there are lots of new communities being built. They are typically further out, but the model homes are beautiful and modern, much! nicer looking than the old 80s and 90s houses that are available in option 2. These developments are located both in the areas where short term rentals are allowed/prevalent, and also in areas that do not allow short term and will become more established neighborhoods in the next 10 to 15 years. Very few of these have a pool. I am all over the place in my house search, and I feel like I will be much better off if I can settle on one strategy. I'm struggling to figure out which of the above options are the smartest investment, or at least avoid which one is the worst investment. I appreciate any and all advice! [link] [comments] |
| Which one is a better investment - smaller townhouse or a larger one? Posted: 27 Feb 2021 08:32 PM PST Planning to buy the first rental property. We have option to buy a smaller townhouse (about 2200 sq ft) or a larger one (about 3400 sq ft). The price difference is about 15% between both. I fee the larger unit might have a better appreciation, but will not fetch 15% more rent than smaller unit. But due to hot real estate market, smaller units aren't selling cheaper here to buy. I need to pay much higher rate per sq ft for smaller ones. Has anyone dealt with this before? Any suggestions? [link] [comments] |
| Buying an investment property while waiting for new primary home to be built Posted: 27 Feb 2021 07:41 PM PST Looking for insights or suggestions. I have started the process to buy a new home (will be my primary residence) and signed a contract with the builder and will close it by September 2021. In the meantime, I plan to buy another investment property (expect to close in next month or so). If I get a mortgage on investment property, I assume it will not affect my mortgage application for my new home that's being built. Could you please share your experience if you had gone through it? [link] [comments] |
| Posted: 27 Feb 2021 10:45 AM PST I am closing on a home in a few days as my primary residence. The house has an attached mother-in-law suite with its own kitchen, ac, bathroom and washer dryer. The unit is in the same address and meter as my residence. I plan to rent this out, but since this is a single family property, I'm wondering what tax implications I should be aware of. Will rental income be taxed at my earned income marginal tax rate or will it be treated differently? [link] [comments] |
| Buying a "single-family house" that is actually 2 completely separate SFHs on 1 parcel? Posted: 27 Feb 2021 04:42 AM PST Hello- trying to get into house hacking. I've been looking for a 2-4 door MFH. I am going to look with my realtor today at a house that is listed in the MLS as a "single-family home" but it is actually 2 separate single-family homes on 1 small parcel of land. Each house has a completely different address (they are technically on different streets). They are metered completely separately etc. The seller is selling both houses together for 1 price/under 1 listing. The houses look to be in very good shape- nice neighborhood, good price etc. If I want to go forward with this deal, how would you recommend I proceed? I'm worried that it won't appraise correctly. We would occupy the larger house on the property for a couple of years (and rent out the smaller one), but the plan would be to eventually rent out both houses (2 separate tenants). Will insurance be a problem? Should I make the deal contingent on getting the property zoned as a MFH (it is not currently- according to what I can tell from the town's zoning map at least). Would trying to get the town to split the parcel into 2 make more sense so I could theoretically sell each house separately in the future if I wanted? Thanks in advance. [link] [comments] |
| Posted: 27 Feb 2021 10:27 AM PST Hi everybody! I may have just done this wrong, and I may need to fix things. My wife and I have 4 properties, and just created 4 LLCs. We always file jointly, we are older, no plans for divorce LOL. But our lawyer set up the LLCs as a partnership. Should they have been setup as a sole proprietorship or does it matter? What are the ramifications? I would mostly prefer to do a single tax return every year... does the fact that it's a partnership require that I do taxes for EACH LLC? Rather then just passing that stuff on to my normal taxes? Are there other ramifications in terms of protection, or moving funds around or the ease of the corporate Veil being pierced? Thanks in advance! [link] [comments] |
| Posted: 27 Feb 2021 12:10 PM PST Hi, I'm selling a property that I purchased before I was married (in a non-community property state) and I'm the sole name on the deed. I'm trying to roll it over to another property I'm purchasing jointly with my wife, but am told I have to assign a "percentage of investment" for the new property against the asset I'm selling and rolling over (e.g. I can't state 100%). Sale price of old asset is $1m, anticipated proceeds are ~$500k to apply against the single property we're buying at ~$1.4m. Any tax law/accountant types have advice on the proper percentage to state for tax purposes? Looking to avoid paying any taxes on the sold property (owned 10 years and have claimed depreciation on taxes). TIA [link] [comments] |
| Is this rental property a good investment? Posted: 27 Feb 2021 07:37 AM PST I'm looking to purchase a low-end rental property in my city. The property costs $100K, is in low-cost neighborhood but the house is sound and doesn't need any major investments. The roof, windows and heating has been updated recently. Down-payment would need to be $20K, there is a long term renter already in there paying $1K/per month and after all expenses and personal taxes taken off, it would net me ~$320 monthly, or ~$3800 yearly. If my calculations are correct, it would be roughly 18% ROI. Is this a good investment? I've looked at rental properties in our city for quite a while and I find these $100K properties to be the best bet, as long as they don't need too many repairs. The number of renters able to afford $1K/per month is high and the costs (property taxes, insurance) are low. At $20k down-payment per property, I would be able to buy one every couple years, and as more accumulate, one every year. [link] [comments] |
| Looking for input/advice on putting part of the proceeds of a rental home into a DST1031. Posted: 27 Feb 2021 09:55 AM PST Selling a rental property that I own in a big market. There will be enough realized gains that I can buy another rental property closer to where I now live (1031) and still have capital I need to invest to defer cap gains. I could buy a 2nd rental property but I am considering a DST 1031. I've read all I can about them online but most of what's out there to read is written by 1031 brokers. Can anyone give me their experience with a DST1031 in terms of risk, appreciation (or lack thereof), stability, how to find a reputable due diligence company, etc? [link] [comments] |
| Looking to bid at a tax lien auction Posted: 27 Feb 2021 03:25 AM PST Currently looking at a few houses and debating I would like to bid on them. My only concern is finding out the house (if I win one) is a total shithole on the inside and needs a lot of work. How bad do houses typically get when it is a property tax auction ? If it helps this is in northern CA in Fresno. [link] [comments] |
| Posted: 27 Feb 2021 04:37 AM PST |
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