All Forum Posts by: Bobby Balow

Wow thanks everyone for all the great comments and suggestions! I'm learning so much about this process and feel better now that higher taxes = making progress and not "leaving something out" 🙂

Our MAGI is much greater than $150K due to my wife and I having W2 income as well and the income from the air bnb does pretty well. We did not talk to our cpa throughout the year. We didn't realize the importance of this as we have always just filed taxes based on w2 income. This was a much needed wake up call to say the least 🙂

Good morning everyone! I want to start by saying thank you to this amazing community! I really hope we can get some advice on our tax situation.

In 2020, we only had 1 rental at the time, but an investor in the area was cashing out and we managed to grab 3 additional rentals which needed major overhauls. We spent close to $150K buying and flipping these rentals and I was shocked to see that our taxes INCREASED by several thousands of dollars even though we made such a major investment and took on substantial debt to buy these houses (in the form of a HELOC and an additional mortgage).

Is this typical? I thought for sure we would be able to write most of this off. I'm wondering if it's time to find a new accountant that also invests in real estate that can help set us up to minimize our tax liability without affecting our ability to acquire additional loans. 

As it stands, we have 4 houses we rent, and we live in a house that has an air bnb in the basement in the Washington DC area (rentals are all in Indiana). Any help/comments/suggestions would be greatly appreciated!

Thanks for sharing your thoughts @Michael Gessner 🙂

I have 3 rentals that are finishing the final rehab before being rented. They are in northern IN where it can get down to 0 F in the coldest winter nights (and possibly even lower). 

They all have exterior spigots/hydrants that are operational and I'm concerned about them freezing in the winter. 

What are others doing to prevent them from freezing? Do the "anti-freeze" hydrants work? Like this: https://www.menards.com/main/p...

Or should I install shutoff valves in the basements and pay my Property MGMT to shut these off each year?

Thanks so much in advance!

I'm an investor in West Lafayette/Lafayette (went to school at Purdue, now in DC). Given the pandemic, I'm hoping there might be some thought in having virtual meetups. I'm not local anymore, but if this is a possibility, I'd love to join! 

I'm really glad I posted this! @Natalie Kolodij does this depreciation also apply to our primary residence where 1/3 of it is used as an Air bnb? 

These are all great suggestions! Thanks so much for everyone's thoughts on this. I wasn't aware of many of those simple fixes like drawer liners for cabinets and under sinks (gotta start somewhere, right!?!). Addressing the safety issues first is definitely where we will be focusing and hopefully a good coat of paint will help "refresh" the property enough to get it moving.

Really appreciate it everyone! Best of luck with your future investments :) Cheers!

Good morning all! Had a quick question about when to depreciate SFH rentals which we are currently buying and holding long term.

My wife and I are on contract for our 4th property (2 with a mortgage) and we've been asked by our CPA if we want to depreciate our properties on our taxes.

My question is when is a good time to consider depreciating rentals or even our primary residence (which we have 1/3rd of the house as an Air bnb)? Things that we are trying to consider are:

• The ability to obtain a loan in the future (lower AGI from depreciation might hurt us) and recapture taxes

I figured that if we sell an investment property, we would likely reinvest via a 1031 to defer our taxes, but would love some opinions on others that have gone through this and might be able to share their experiences for setting up a good foundation.

Thanks so much in advance! Cheers!