Should I live in my first multi-family purchase?

[Ian Davies]

I have been planning to start investing with a few of my family members over the past few months and we are in a position to move forward and are assembling our team. We are forming an LLC and all 3 of us will have equal contributions of $20K to start the business and purchase our first property.

As one of the members I intend to move into the first property to get my feet wet as a landlord and property manager. As well as to address any renovations, improvements or fixes that may be necessary while I am there.

We just sent our accountant an email with our plans and he informed us that me moving into the property would be a bad idea as we could only claim about 75% of the available tax deduction.

"Ian living in the investment property becomes the problem and should be avoided. His personal use would limit the deduction of expenses to 75% of the total, net of any rents paid."

Do any of you have any insight on this?