All Forum Posts by: Jack Gray

It's also worth skimming through the actual IRS rules on this:

https://www.irs.gov/businesses/small-businesses-self-employed/tips-on-rental-real-estate-income-deductions-and-recordkeeping#:~:text=These%20expenses%20may%20include%20mortgage,and%20maintaining%20your%20rental%20property.

Hi Catie, I'd say it's time to find a new accountant who specializes in real estate.  

Regardless of whether you qualify as a "Real Estate Professional" for tax purposes (by having 750 or more hours of work in the field during the calendar year), your expenses related to the property should at least offset income from the property.  Whether any losses after depreciation can be used to offset your W2 income is a different question, and will depend on your adjusted gross income for the year an other stuff, so seek out a CPA who can advise you based on your exact situation.  

My CPA has saved me quite a bit over the years on my rental properties (https://arnesen.cpa/) and is helping me with a cost segregation study currently to accelerate depreciation on one of my rental properties.  

Hi Chris, this is one of those times where you will save money speaking to an accountant before you take any action.  

Don't underestimate the long-term wealth-building power of having the tenants pay your mortgage, even if you're not cash flowing much.  You may wish to consider moving out, keeping the property, and converting to one long-term tenant for ease of management.  

As others have said, as long as you live in the house for 2 of the previous 5 years, you will not have any capital gains tax to pay...although with only 16 months of ownership, any gains you have will likely be wiped by realtor commissions and other selling expenses.  

PM me for the name of my CPA.  He's saved me quite a bit on taxes over the years and understands real estate transactions and the investing side of things very well, and can help you build a strategy for your situation.  

Thank you everybody who responded.  That helps put my mind at ease.  

I'm going to wrap the AC duct, put down some mousetraps, and avoid hiring any overpriced contractors.

Hello BP community,
I was wondering if I could get some help from some of the experts in the room.

A house I just purchased in central Virginia has a 900 sq ft crawl space with a poorly installed, torn vapor barrier. I noticed this during the inspection but didn't think it was a serious problem. Here's what the crawlspace looks like:

• White efflorescence on about half the concrete foundation blocks, indicating some water intrusion
• White mold in small patches in 1 or 2 spots on the floor joists
• A few droppings indicating a mouse or other pest is living there
• Condensation dripping off the AC duct work into a small puddle on the vapor barrier, plus one other small standing puddle with no visible source (not a leak, maybe recent heavy rain)

I obtained 3 bids from different companies to remove the existing vapor barrier and fully encapsulate the crawl space and install a dehumidifier (2 bids came in at $15k and $16k, one came in for $26k which also included mold remediation and a sump pump and trenching).
All 3 companies took air humidity readings and moisture readings of the wood joists and warned me about the long-term danger of my floor joists warping since they are made of composite wood.

To me, these 3 bids seem absurd, especially since as near as I can tell, I have a very normal crawlspace with just a tiny bit of water here and there and very little mold. I haven't noticed any issues with floors squeaking or doors out of alignment or foundation or drywall cracks.

4 Questions:

1. Is any of this even a problem? Should I be concerned?

2. What, if anything, should I do about this?

3. What is a fair price to for the work?

4. How should I find a reputable, and affordable repair company? I tried Angie's List already.  

Thank you for any help anyone can provide!

Hi Kyee, I'm a landlord in Tampa and you probably aren't going to find many 1% rule properties here.  A typical $300k house will rent for about $2k/month, so you're looking at 0.66%. Lower priced properties in the midwest will probably have greater cashflow, but may not have as much appreciation potential.  

I'm at a complete loss what color to paint this house.  Whatever it is will need to match the brownish-orangish roof, plus the brick columns.  I'm planning to repaint the house, trim, front door, and garage door as soon as I can figure out a good option.  

The house is located in Tampa, Florida.  Thanks in advance for any help anyone can provide!

For high-end rental properties, where do people find window treatments (blinds and curtains) at a reasonable price?  

I ask because we're working on updating a 4 bedroom single-family that will rent for $2,800/month and my wife just spent $800 on floor length curtains for two windows from Pottery Barn.  There's got to be a better way.  

On the last house I renovated (also a high end single family) we bought blinds at Lowe's and curtains at Pottery Barn and it was over $2,000 just for materials.

Hi Jon,

I bought a house in South Tampa (4bed/2400sq ft, built 2005) in March, had it inspected, and then discovered drywood termites swarming a month later.  They were in the upstairs bathroom cabinets (and possibly the wall behind the cabinets).  After getting 5 quotes (the cheapest to tent was $2,400), I decided to buy a can of the termidor foam on Amazon for $30 and treat it myself after watching a few youtube videos. So far so good.  

The prevalence of termites in Tampa is one of the reasons block construction is so much preferred here (along with storm resistance and reduced utility costs).  

If you're seeing signs of drywood termites in multiple locations, then spot treatment probably isn't going to work and you'll need the place tented.  I'd bid the job on thumbtack.com or homeadvisor.com. Look for good reviews on Angie's List too.

I tend to think the annual warranty is worth it on wood frame houses around here assuming it's not much more than $200/year.  Generally I think smaller companies in which the owner shows up and does the work himself are best.  No need to waste time having every contractor come by in person, just ask over the phone or online how much they'll charge to tent a house your size and warranty it each subsequent year.  

Good luck!

Hi Dustin, check out Homeadvisor's calculator:

http://www.homeadvisor.com/cost/

I also like to use this one since it's a bit more precise:

https://www.remodelingcalculator.org/interior-pain...

Once you have a ballpark, bid the job on homeadvisor or thumbtack.com or call the pro desk at your local home depot and ask who they'd recommend.  Make sure the quote specifies # of coats, baseboards/trim if needed, and wall patch/prepwork.