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Updated over 6 years ago on . Most recent reply

User Stats

8
Posts
2
Votes
James Channing
  • San Jose, CA
2
Votes |
8
Posts

In contract for a 2nd home - 1st time landlord

James Channing
  • San Jose, CA
Posted

Hello, I am in contract for a 2nd home, and plan to rent out my first one.  The rental will be a condo and I plan to keep it forever.  Are there any good reads on what to plan before converting it to a rental?  I have done some research and I have some basic understandings and questions

1) Looks like I need to know a "conversion to rental date"  Is this just any date I want to pick after the 2nd house closes?  If my 2nd house closes on 9/30, should I use 10/1 as my 1st house's conversion date?  Or say 12/1 which is after I have finished moving/cleaning/advertising and got a tenant signed?  I guess my question is for tax purpose does it matter?

2) After converting to a rental, I understand the expense to get it ready to rent can be used to deduct rental income.  Say if I incur $3000 to clean/fix etc and make it to a rent-able condition from now to end of 2018, and it rents out 1/1 2019, can I carry over the $3000 expense as a loss to deduct against 2019 rent?

3) for depreciation purpose, I need the original "structure" cost which I have in my first assessment from county.

4) I understand that if I sell in the future, I need the "fair market value at time of conversion" number.  Say it converts on 10/1, is it sufficient to use redfin and zillow as an estimate?  Or should I order a formal appraisal?  Living in California, the annual assessment is limited to a ~2% annual increase, so the assessed value is not the current fair market value.

Thanks!!!

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