Tax Deductions - turning current prop into a rental

[Rei Reid]

I currently live in a condo that we plan to rent out instead of sell when moving into a home. I’ve owned it since 2009.

I think there’s about 12k of work to do to get it rental ready - bathrooms, new appliances, garage door repair, minor paint, new carpet. I’d like to write off as much of it as I can, ideally all of it.

Is there a time limit between when I can start that work and count it as rental repairs/supplies and when I rent it out to make it deductible? Do I need to have an LLC in order to do so?

[Rei Reid]

@Michael Plaks

Yes, agreed.

My goals are to build a REI portfolio that creates enough passive income that our day jobs become an option.

Just trying to figure out if it’s better to sell and use the gains for the downpayment or refi and use the loan for the downpayment.

Selling gives me an opportunity to buy a house in our current market and a long distance investment elsewhere in a lower value market.

Using the refi cash out gives me an opportunity to buy in our current market and start my portfolio with my first rental - at a higher profit per month than the lower value market.

Just weighing the options.