All Forum Posts by: Jo Jennings

It's not that we have no intention of renting it. It's that for now we want to hold off for several months, possibly until the end of the year, so that we can see how the fallout from the pandemic plays out. In the meantime, we may accelerate our plans to move and move by the end of the year. However, our plan was 100% to rent it out immediately and for several years, until about 3 days ago. Now, we are trying to figure out what our options are considering the huge curveball that has been thrown at us and everyone else due to COVID-19. Had we known ahead of time that this was going to happen, we very well may have financed this as a second home instead of an investment and saved quite a bit on interest. But two weeks ago when we started the process, our plans were to rent it for at least 3 years, likely 5 years, before moving. 

We definitely don't want to be dishonest. We are just trying to figure out what we can do at this point with the new circumstances. 

Thank you for your reply. Is there a period of time that it can be empty before we have to rent it and still be able to treat it as an investment property?

We are in the process of buying our first investment property. We aren't going to do this as a regular thing. Our situation is that we wanted to purchase a home in the area we want to move to in a couple of years and then rent it out until we can actually move. This would make it so that we have someone else making the payments and would allow us to deduct things such as trips to the area and depreciation.

We are a week or less from closing (assuming no hiccups). The home will be financed as an investment property because our initial intention was to rent it out. Now COVID-19 has become an issue. We are concerned about getting a renter in that can simply choose not to pay and we cannot evict in our area due to COVID-19. We are also considering accelerating our timeline in regards to this home becoming our primary residence, so we don't want to get someone in with a lease just yet.

What can we do tax-wise? If we let the house sit vacant for the rest of the year, can we still claim it as an investment property and deduct our closing costs, depreciation, travel to close the deal, etc? How long can we leave it vacant without the IRS flagging us? Or are we stuck paying a higher interest rate as an investment property and not able to have any tax benefit? At that point, are we better off to change it to financing for a second home instead of an investment property, or are we too far into the process for that (we are just waiting for our appraisal and then we can close)?

The only thing we know definitively is that we want this house as our home for retirement and we don't want to rent it out for at least several months while we see how everything plays out in terms of the economy, landlord restrictions due to COVID-19, and whether or not we are going to move into the home sooner than we thought.

Advice is much appreciated.

Will be traveling out of state to attend the closing of my first rental property. It is brand new construction. Financing is a thirty year conventional mortgage listed as investment property. During the visit, I will attend the closing, purchase and install necessary items for the property such as window coverings, meet with a property manager to start the process of getting it rented, work out utilities, etc. Will I be able to deduct my travel expenses for this trip? What if I leave a couple of days prior to closing and I don't "officially" own the home at the time that I start the trip?

Any advice and information is appreciated.