All Forum Posts by: David M.

Sounds like previously owning rental property in an OZ (which I do) doesn't benefit from this at all, even if we improve it substantially. Is that correct?

I have a bachelor's in business and do my own general ledger for the rental portfolio, but I work full-time as a teacher, so all the tax intricacies can throw me for a loop. Trying to figure out when I can quit teaching and manage/grow the portfolio full time, but one major impediment to having enough free cash flow to pay the bills is having to pay out of pocket for the capital expenditures but not being able to recoup that expense in the same year as a deduction. In a year with lots of capital expenditures, taxes could eat significantly into the profits I need to take home.

I suppose it averages out in the long-run, since I'm writing off that depreciation in years where I don't have as many capital expenditures, but it makes it difficult to plan and make the jump full-time.

Thanks for the information. It was very helpful.

This is very helpful, thanks. So say I bought a house for 50k, and the building is worth 40k. Fast forward 13 years, and I'm halfway through depreciating the structure, so my basis is 20k.  I add a roof that costs 4k.  My basis is bumped up to 24k.  If I sell in another 13 years, the house is completely depreciated, but I have a 2k basis because the roof is only halfway depreciated. Does that sound right?

What happens if I have to replace the roof before the 27 year depreciation schedule for the roof is finished? Do I continue depreciating the old roof even if it's been replaced?

Sorry if these are silly questions.

Hello, all.

I generally let my accountant do his thing, but I try to understand the ins and outs of taxes for my own benefit as well. I understand the concept of depreciation on a home over 27.5 years as an expense that has to be repaid, assuming the property doesn't lose an equivalent amount of value over that time (depreciation recapture). However, I'm struggling to wrap my mind around the idea that I have to depreciate, for example, a roof over 27.5 years.  If I sell the property 10 years after putting on a new roof, I miss out on claiming 17.5 years of that cost, or more than 2/3 of that cost. If my rental doesn't appreciate ( generally, mine don't; we buy in working class areas for cash flow), am I just out the difference between what I wrote off as depreciation, and what I paid in up-front cost to replace the roof?

This would be so much simpler if I could just write off the cost of the roof as an expense and deduct it in one year. Sigh.

30 years of experience says otherwise.

We have more than one hundred of these SFH in the $20k-$50k, $650-$775 rent in the Midwest that say otherwise, but they take a special kind of landlord and additional attention.

Committing a crime in the past makes someone a criminal now? Interesting.

Based on the OP, I don't see this being a level-headed, rational discussion. I could be wrong, of course.

OP here. Good advice from everyone. I'm checking out the Floor and Decor website right now.  I've got a flooring contractor who is pushing a Comtec vinyl flooring system (click together) at $3.50 a square foot. That's more than I want to do for a 2/3 BR, 1 BA that rents for $675 a month.  He claims it's 20 mils, but I'm wondering if he means 20 millimeters thick vs. the wear layer on the top? I've not seen any vinyl plank flooring products that have a 20 mil wear layer, but I may not be looking in the right place.

I'm between these two products (unless someone knows something about the Comtec product that I don't):

http://www.menards.com/main/flooring-rugs/vinyl-fl...

Does the 3 mm thickness refer to the wear? Am I mixing up the different numbers when it comes to flooring? I hear "mils" and "mm" frequently. Are they actually referring to two different things? This one comes out to $1.70 per square foot. I'm probably going to pay him about $2.00 per square foot to install (does that sound about right?)

The other choice:

https://www.flooranddecor.com/lvp-laminate/smoked-...

The two have similar thicknesses. I'm not seeing anything about wear. Are all vinyls inlaid all the way through the product now instead of just being imprinted on top, making the "wear thickness" irrelevant?

I know I"m all over the place. I'm looking to take on more of our family's portfolio in the coming years and really want to do the work up front to get places tenant-proof while still looking relatively attractive and clean for the working-class demographic we target.

This is exactly why politics don't belong here...

Replacing the nasty carpet in my C-D neighborhood 3 BR, 2 BA single-family house. Rents for $675, and we got into it for $20k, so I'm not looking for luxury vinyl flooring. I do, however, want something that will be durable for multiple moves, pets, kids, etc. I'm worried that the Allure vinyl flooring with the grip strips (instead of click-locking systems) may not hold up as well over time. 

Any tips? Also, an unrelated item: where is the best place to post on the forums to get referrals for reliable handymen in the Cincinnati, Ohio area? Thanks!