All Forum Posts by: Jon Begley

Yes, it's still residential rental property depreciated over 27.5 years. According to “residential rental property” means any building or structure if 80 percent or more of the gross rental income from such building or structure for the taxable year is rental income from dwelling units. A 10-unit apartment building clearly passes this test as presumably 100 percent of the gross rental income is rental income from dwelling units.

How the bank classifies the building is irrelevant in determining the tax depreciation method.

Awesome, thank you for taking the time to answer my question

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I have a 10 unit apartment building that is considered a commercial property by the bank, but does the IRS still consider this a residential property? I was reading this article Real Estate Depreciation: A Deeper Look and it implies that multifamily properties over four units are still considered residential in terms of depreciation (27.5 years). Is this correct, Thanks

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Originally posted by @Wayne Brooks:

Yes, 1-4 units is residential, over that is not.....hence the reason for the difference in terms, in addition to your primary residence being owner occupied.

I'm sorry, I probably didn't explain my situation very well. I intended to get a loan for $130,000 for the rental property. They gave me two options. I could have a 20yr loan with 5yrs locked in at 4.5% and the rental stand good for the loan or I could have a 20yr fixed at 4.5% if my home stood good for the loan. I'm just wondering if it's typical for people to have 20yr fixed loans on investment properties without providing other forms of collateral.

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I am currently working on my second real estate deal and my first loan for an investment property. I'm working with a loan officer at a small bank that I have a good relationship with and have done things with in the past. The property is a six unit with great cash flow currently priced at $169,000. The bank I'm dealing with will only do a 20 yr fixed if they can have a $130,000 mortgage on my primary residence which is paid off. If I don't use my home the terms are 20 yr with a 5 yr lock at the same rate. Is this typical or should I start shopping around?

Additional Information

4.5% rate on either loan
790 credit score
$0 debt
Good Income

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All Forum Posts by: Jon Begley

Jon Begley has started 4 posts and replied 14 times.

Post: Multifamily Depreciation Question - 27.5 or 39 Years?

Post: Multifamily Depreciation Question - 27.5 or 39 Years?

Post: Does your rental property usually stand good for the loan?

Post: Does your rental property usually stand good for the loan?