All Forum Posts by: Ashton Ferrazzo

@Ashish Acharya How much do you have to allocate between land and building? Or is that based on the tax info for the county?

Also, unless you have a job outside of the rental property, you would only be taxed on the $8k right?

@Larry Turowski @Paul Allen thank you all for your responses!! Very very helpful. 

@Andrew B. I like the idea of the 1031 exchange, and I forgot about having to pay down the total depreciation at sale, which could significantly impact the property, unless I had a condo or something (which could potentially depreciate on its own). Then I never pay Big Brother until I die. And maybe not even then...

Hello folks!

Can someone tell me if I am thinking of depreciation and write-offs in the correct manner for rental properties? I was trying to envision a scenario where someone could potentially have (close to) $0 tax liability. See my non-professional numbers below:

I was doing a quick on-the-napkin calculation of buying 15 of $100K homes, which would allow for ~$3636 in depreciation on each property per year, ~54K in total tax write-off/income reduction per year. 

Add ~$500/month in expenses (low-end), for a total of $6000/year in expenses per property = $90K taxable income reduction across 15 properties.

Let's say each home has an 80k mortgage with interest of 4.5%. I approximate about $4000 (low-end) interest payments per year for the first several years, per property. $60,000 taxable income reduction.

Add $500/year (low-end?) home insurance deduction per property = $7500 taxable income reduction.

Add $1000/year (low-end) property tax deduction per property (local taxes in Charlotte, NC for 100K home) = $15000 taxable income reduction.

Total tax write-off/reduction = $226K?

Let's assume each property rents for $1300 per month (conservative). Income = $234K.

Someone could potentially be getting taxed only on 8K, which at a 10% tax bracket = a whopping $800 in taxes.

Most likely I am leaving something out - please rip this apart. I probably have no idea what I am talking about. Just trying to see what it might take to be taxed at close to $0?

You all are amazing - just to answer some questions there:

Nobody is replacing anyone at this time. The home is a first attempt at renting (yay!), so currently vacant. I like the idea about the release form!

One other question:

How would I then handle security deposits. I assume one would be charged to both parties, and then provided back to whichever tenant is left at the end of the 12 month or month-to-month term?

Hey folks!

This is probably a really really basic question but I have 2 people who are friends, interested in sharing a room. 1 of them will be leaving in a couple of months, but the other one would stay. I wanted to sign them both up for a 12 month lease, so that even if one of them leaves, they are both still responsible for payment.

Should I ask them to apply as primary, and co-applicants? Or should I ask them to apply separately, and then when we go to sign final lease documentation, put them both on the lease with a 12 month agreement?

Also, if I put them both on a 12 month agreement, how should I handle payment? Do I need to designate one as the "Primary" tenant who will be paying rent?

I did yes, and they have 3 of them, but not all. Ideally would love to own the books so I can reference later too. 

Hello folks,

Brand new to Real Estate Investing and really appreciate all the advice people are providing on these forums. Been lurking for some time now, but trying to get out and network and talk with folks in my local area. I am based out of Charlotte, trying to eventually invest in buy and hold rental SFH homes in good locations.

As an aside, I am wondering if anyone on here has the following books they would be willing to either give away (hah!) or sell to me at a discount - trying to continue my reading regimen to become more knowledgeable:

• The Book on Managing Rental Properties: A Proven System for Finding, Screening, and Managing Tenants with Fewer Headaches and Maximum Profits

• Rich Dad's CASHFLOW Quadrant: Rich Dad's Guide to Financial Freedom
• The Snowball: Warren Buffett and the Business of Life
• Trump: The Art of the Deal
• Property Management Kit For Dummies

Thanks to everyone on these forums for what they do, the knowledge they are willing to share, and the incredible resources and opportunities they provide. You all are awesome!!

Sincerely,

Ashton