All Forum Posts by: Karen Kushner

Hi All! I am under contract on my first STR beach property. $1 million home. 20% down. 800k Mortgage. The plan is to put the property in an LLC at the onset (I heard this was easier/better rather than putting in personal names and transferring after the fact).I was given the following rates.

• 30 year fixed: 6.875%. $5255/mo
• 15 year fixed: 6.5%. $6969/mo
• 10/1 ARM. 6.5%. $5056/mo

We currently have a 15 year fixed on our primary home as we wanted to go into retirement debt free on the primary home. However, for a rental property we may feel differently as it is an investment and not the roof over our head. In general, what is the strategy for choosing rental terms in the current market? Take as long as possible and then refinance? Or try and choose the best rate available? Our projected rental income is about 75K annually. Thank you!

Thanks for the response! If I’m understanding the bonus depreciation correctly, is it true that it only applies to the personal property and NOT the building or land? On average, is it about 25% of the purchase price (x60% for 2024)? Working these numbers to get an idea of what to expect!

Thank you Kelly!

1. Ok, so it would have to be purchased, fixed up, and placed on AirBnb, etc before the end of the year if I'm understanding that correctly.

2. This would be an investment property.

3-5. Gotcha, thank you.

Yes, we are actively speaking with our CPA to check on if this strategy would work for us! I appreciate the BP community weighing in as well!

Thank you for the reply. For clarification, my husband is a high income earner and I currently stay home with the kids. We file jointly. I am hoping to meet the requirements for the STR loophole and offset his income. I understand I would need to get REP status in order to do the LTR bonus depreciation (maybe one day!) Thanks again for your response!

Hi All,

Interested in purchasing a STR this year, meet material participation rules/100 hrs, obtain cost seg and bonus depreciation. If we can swing it, we may also be able to purchase a LTR towards the end of the year. I'm wondering what the interplay is between the tax writeoffs for these properties against my husband's W2 income? Do the two rentals combine and then offset W2 income or do they remain separate?

Thanks so much!

Hi All,

Looking to buy a STR at the Jersey Shore this year, meet the material participation requirement/100 hrs, and take bonus depreciation on the unit for 2024. I have a few questions regarding this strategy:

1. What is the minimum number of stays/time needed to satisfy the STR requirement? If we purchase in the fall, we may only be able to get 1 or 2 weeks rented. I know the average length of stay needs to be 7 days or less.

2. Can we qualify for a full year of depreciation if we only own the property for part of the year?

3. 60% Bonus Depreciation in 2024: Does this apply to the building only?

4. If bonus depreciation is taken in 2024, how is the remaining 40% depreciated? Is this over an expedited timeline?

5. Is a cost segregation study even necessary to get bonus depreciation?

Looking ahead to 2025, our strategy would be to buy a second STR. My plan would be to actively manage the new property and hire a property management company to manage the first property. Essentially we would actively manage each new property for the first year in service, take bonus depreciation on it, then 1031 exchange for another.

1. Is this strategy allowed? Is there anything prohibiting me from doing this tax-wise?

Thanks so much!

Very neat idea… thanks for sharing! Easy rule to remember! 

Thank you Kevin! I appreciate your suggestions and input! I’m just learning so this was really helpful! I’ll probably upgrade to the pro membership for access to those tools and calculators. Thanks again

First post on the Bigger Pockets forum, and looking to buy my first investment property. I hope to actively manage my first few properties as I build my portfolio. The purpose of this post is to practice utilizing the formulas needed to analyze this particular deal and see if anyone has advice/suggestions.

Located in suburban Phildadelphia in a lovely, walkable area to many shops and restaurants, this is a duplex property (2br/1b and 1br/1b) listed for $629,000. The building has been extensively renovated by the prior owners in 2022 including new heat/ac, appliances, flooring, kitchens/bathrooms, roof. Pretty much turn-key. It is currently occupied by tenants - one is month to month paying $1595 and the other has a lease until Jan 2025 paying $1675. Net income = $39,240

Monthly operating expenses are as follows: Trash - $33, Landscaping/yard - $66, Electric - tenants pay, Water - $95, Maintenance $87

Monthly taxes about 3K

So, gross expenses are at $41,064

If I'm doing the calculations correctly, my net operating income is -$21,888 and cap rate is -3.4%.

Obviously the current numbers look terrible for this investment, but I feel like the rent should be raised significantly based on comps (above 2K each unit). If that were the case, let's say 2K and 2.2K per month, making monthly income =4.2K and annual = 50,400K.

Now my NOI=$9,336 and my cap rate is 1.4%. Still not great, right? I think we will pass on this property unless there are any other opinions out there?!