All Forum Posts by: Bryan N.

What is the best method for begginning to filter all this data. My thougts were:

1) Calculate mortgage based on purchase price and down payment

2) Apply 50% rule

3) Determine "potential" cash flow

4) Physically check location

Then work from there (real expense numbers/any rehab/ etc).

Any other thoughts?

Thanks

Debt management is very important to maintaining your clearance. It is a risk factor that is considered while being investigated. As for 20K and 50K magic money showing up, make sure you have all the paperwork showing the legality of it and you "should" be fine.

@Steve Babiak

It seems the paragraphs below may apply to my situation. The key is to wait until the year it will become a rental.

Conversion to business use. If you place property in service in a personal activity, you cannot claim depreciation. However, if you change the property's use to business or the production of income, you can begin to depreciate it at the time of the change. You place the property in service for business or income-producing use on the date of the change.

Example.

You bought a house and used it as your personal home several years before you converted it to rental property. Although its specific use was personal and no depreciation was allowable, you placed the home in service when you began using it as your home. You can begin to claim depreciation in the year you converted it to rental property because at that time its use changed to the production of income.

If I'm forced to leave the area the rent would bring 1,900 a month.  The mortgage (15yr 3.375) is 2,400 per month.  Either way, I am going to pay it off.  It will only benefit us in the long run and I can afford to do it.  The only debt I find acceptable is mortgage debt.  It wouldn't make sense to refi into a 30 or any term really when I will definitely live here two more years and can zero the mortgage in the process.   I want to do the "rent ready" repairs listed above.  I just don't want to make a bad tax move by timing it wrong.  Maybe it's worthwhile to vacate the property (2yrs from now) and then fix everything and rent.  At least the timeline would be closer to the rental than if I did it this year. 

I am pursuing my first rental property at the moment.  Pre-approved loan will be setup today. I'm adding extra payments to this property to pay it off early.  I'm in the military, so if I have to move I want this paid off.  If I don't have to move in the next three years, I will buy another primary and rent this out.  It will be a nice rental and I will use equity from this house to purchase more properties in the future.  

My primary residence will be paid off in less than two years.  At that time, I am going to purchase another primary and rent out my current one.  The house will need new windows and a roof within the next five years, so I am not sure when I will do those yet. Maybe after it is rented and in between leases, or prior to the first rental period when I move out.

To get it "rent ready" I will need to replace a shower insert, some paint, carpet etc prior to renting it out.

Do I have to wait until I move out so I can use those "rent ready" repairs towards any tax write-offs?

Can I start doing them over the next two years while still living in the residence (save the receipts) and state that it was to prepare the rental (which would be factual)?

Thanks BP

Thanks Sean 

I have not heard of them.  But, there seems to be a ton around this area.  

Looking for any recommendations for property management companies in the Hampton Roads area. Will have financing secured this week and the property search will begin.

Thanks

I'm still working on my first deal. But, these are various costs I'm going to be factoring in addition to PITI. Of course, all will not be applicable do every property. Mortgage (P/I) Property Tax Insurance Property Management Fee Repairs/Maintenance Vacancy Umbrella Policy Advertising Gas/Electric Oil Water/Sewer Trash Pickup Lawn Care Supplies Replacement Reserve CPA

Thanks Josh,

I am an avaition maintence officer. I've always wanted to be stationed in Japan!!!