All Forum Posts by: Julie Halloran

I'm currently undergoing a renovation on a 2-family I purchased a couple of weeks ago. I anticipate the renovation to last past the new year, and will include items like painting, refinishing floors, new kitchens and baths. What type of items/work (if any) can I deduct from my taxes, and considering I won't have rental income until after January 1st, is it better to defer more of these costs into the new year?

Thanks!

Julie

Hi. I'm looking for recommendations for a general contractor for a rehab on a 2-unit multi-family in Belmont. Most of the work is cosmetic - a lot of wallpaper removal, painting, refinishing and repairing floors, new kitchen in one unit. Know anyone? Thanks! 

I just purchased my first multi-family (in Belmont) and have a couple of questions about lead paint. I've heard that the laws around lead paint in Massachusetts are changing December 1st, and that it could make it easier and less costly to remediate lead hazards. Does anyone have any info on the changing lead laws and what that might do for a landlord/homeowner? Also, I'm looking for opinions on what to do regarding doing a lead inspection or not. The house has never been inspected, but it was built in 1924 so I'm assuming there's lead. I've heard once you inspect, you have opened yourself up to liability if you don't then remediate. But, without inspecting, I have no idea what it might cost to remediate, so it seems like a catch 22! Belmont is appealing to families with children, so ideally I would like to get that deleaded certificate. But having no idea of the final costs, it's scary to open that can of worms. What would you do?

Hi Troy. Thanks so much for responding! I honestly don't know anything about the rental market in the area since it's not where I reside. I could purchase a unit for about $250k, and I've made about $17k this year without really trying (ie: not renting during peak weeks, sometimes holding back weeks because we thought we might end up using it but didn't). I think I could comfortably make $10k more if we weren't using it ourselves, probably more. From my calculations, that covers my 'operating costs' on a regular basis, but like you pointed out, doesn't account for things like major repairs, new appliances, etc. To cover that same cost ($27k a year), rent would have to be above $2k a month. I really don't know the going rate, but that seems high for the area. It's a seasonal destination so I imagine many of the residents might not actually live there year round.

Food for thought for sure though! Thanks!

Thank you so much for your helpful replies. Richard, plowing/yard maintenance/trash are all included in the HOA dues. I was calculating the amount we've made as what was deposited into our accounts by the rental websites minus taxes, so that's including the % fee, cleaning I charge directly to the renters, and I use a management company on an a la carte basis (when a toilet gets clogged or something stops working and I need to send someone over) so there hasn't been too many charges there. I did forget water/sewage so that's something I need to add in. Repairs is a tough one for me to annualize - is there a standard amount people use? We did a renovation on the unit when we bought it, so a lot of the big ticket items in the unit are new.

Link, we are in the White Mountains, 3 BR/2 BA and the HOA fees are $150/mo. There's also an annual membership fee to the pool in the community of $1200. I manage all of the renting myself (through AirBnB and VRBO) but we use that maintenance company when we need them and for cleaning.

Shelby, that's a good point about furnishing the unit. We bought our current one completely turnkey and didn't HAVE to replace much, although we did by choice. We put a lot of money into making it something we could really feel like we were getting away to, but I don't anticipate doing the same level of work to an investment property. That being said, I'm not sure the best way of calculating the big expenses of down payment and reno work into the equation. 

If I can really cover my costs through rental income, I feel like other people are buying a place for me that I will eventually own outright and will hopefully appreciate decently. Can this actually be the case?

My husband and I currently own a STR property at a ski resort in New Hampshire. Last year was our first full year of owning the property and renting it out, and we think we did fairly well. We calculated our total yearly costs of the unit to be $27k (mortgage, taxes, insurance, HOA fees, electric/water/cable/internet. We made about $17k in short term rentals using AirBnB and VRBO - but because it was our own vacation place first and an investment second, we didn't rent it out on the most popular weeks of the year (Xmas, school vacation, long weekends, July 4th, leaf peeper weekends in the fall, etc). We feel like if we bought another unit that was strictly for investment, we could come closer to breaking even from a cash flow perspective.

The question is, what am I not thinking about? To me, it seems like a no brainer to invest in a property, have other people pay my mortgage and fees, and one day own the property outright without ever having to put much of my own money in it. Even losing $5k a year or so if we don't quite break even makes sense to me. So, what am I missing? What am I not considering that will come back to bite me? We have the cash for a down payment and a renovation. I guess the other option is to put that money in stocks or another type of investment vehicle.

Thanks in advance for any help!