All Forum Posts by: Jason Reynolds

@Jeff Bridges

Thanks, Jeff. That is exactly the information I need. That lets us push off the decision just long enough for her to change her mind. Big thanks to you. Also, you were awesome in The Big Lebowski.

That is what I would prefer to do, but my wife is still attached to the house. We will have to hold it for a couple of years until that fades, then we can sell it. Any other suggestions?

I am moving, and am looking to rent my current home, at least for a couple of years. There is a considerable amount of equity in the home. It has been my primary residence for five years. I have some questions at so how that affects me when tax time comes.

When this property becomes a rental, and then I sell it, will I have to pay capital gains?

If so, will that be only for the appreciation after it became a rental, or the entire appreciation?

What forms should I acquire/file to position myself best for taxes/risk?

Should I get an appraisal to cement the value at this time, for future reference?

Should I do a cash-out refi while it is still my primary?

Thanks in advance for any help you guys can provide.

@Jake Thomas

Thanks Jake. We were hoping to self-manage, due to the expense, but I have now been told by several people that it is not worth the hassle. Mortgage, tax, and insurance are around 750 all-together, and rental comps in the area are between 950 and 1400. We could afford a property manager, but, after capex, management costs would eat any profit. I know the smart move is to sell the house, but, happy wife means happy life, so I am just going to have to wait until she does not see this as her home any more. Hopefully, the renters will not destroy it before then.

@Jake Thomas She is attached to the house, so we will be keeping it for a few years at least. I have already tried to make that argument, to no avail. Considering that, do you have any advice?

Thanks for the input. Also, What about taxes? Do I need to move ownership to an LLC? What about capital gains? How do I shelter the equity I have now, so that I do not pay capital gains on it? I think that selling the house, which I feel is the better move, will become a more palatable option for my wife in a few years. I do not have any other investment properties, and do not foresee buying any in the next couple of years.

Hello BP:

I have been educating myself for several months on how to get started, and now have had a rental fall in my lap: my own home. I am moving to a new job, and we intend to keep our current home as a rental. Here are the details:

Fair market value: 200k

Fair rental price 1100/mo

Mortgage+insurance+tax= 750/mo

Owed on Mortgage: 110k

I understand that this is not an acceptable rent-to-value number, but my wife will not sell the house. Period.

Can you help me with resources for:

Background and credit checks.

Lease agreement contract template

Also, this house is fully updated. We have made improvements here that I would never add to a house that was to be a rental. (granite, tongue-and-groove ceilings, 3-piece base molds, etc.) What can I do to safeguard the home for the future?

Basically, pretend that I over-invested on the front end. How do I mitigate the costs related to that?

Thanks,

J

 That's one of the first things I hear from any veteran. What are dependable resources to track job growth and immigration numbers? Also, living in boone and investing off the mountain, I have to be careful not to overestimate rents. Where can I get good numbers for that?

If the seepage is minor, and you are a hands-on type, there is a poor-man'so solution for this. If you want to send me some pics of the space, I can walk you through it.

You can go either way. If you get the engineering report first, it will be unbiased, but if you have a contractor install something outside of his recommendation, you may end up paying another engineer to draw up new specs. Here in NCandVA, we have to have engineer specs to match what is installed. Not sure about other states.

If you talk to the contractor first, he will likely steer you to an engineer who knows and believes in the solutions that particular contractor offers. 

Another thing to consider: the engineer provides an educated opinion, but is not liable for your results, and opinions differ from one person to another. The contractor provides the warranty. Especiallyou if you plan to hold the property, look closely at the company and contract . The warranty probably disappears the day they close up shop. 

I hope this is helpful. Let me know if I can help in the future.