All Forum Posts by: Matt H.

Hello -- I am interested in short-term renting my house for a bit at the end of this year and ran across the 15 day rule for excluding the rental income from taxes. I wanted to see if anyone knew the specifics for how those 15 days are calculated? As things stand now I have 13 nights booked with a check-in time of 4pm and check-out time of 11am. Does anyone know if both the day of check-in and check-out count as full days for tax purposes? If so, even though I only have 13 nights booked am I at risk of exceeding 14 days? Thanks!!

@Matt M. Would love his info, thanks! Just was using 200k as a random round number but have seen estimates all across the board. $125k would clearly be much better though. Thanks for the help. 

I'm looking to build an ADU ("accessory dwelling unit") on my property in Denver and am wondering if anyone has any experience with the type of value it might add to the total property. I know they are notoriously difficult to appraise due to lack of comps. I'm not necessarily expecting a dollar for dollar return but am hesitant to spend $200k on a project to only have it add 50k in value. Any thoughts are greatly appreciated!

Originally posted by @Kevin Lefeuvre:

Start by putting the house into the LLC after getting appraised. She gets all the shares. Then the LLC will issue new shares for whatever new investment is done for the ADU to whoever does it.

Example. House is worth 200. ADU costs is 50. You'll end up having 10% of the shares of the LLC per the above scenario.

If she's paying mortgage and you don't pay rent, it will require adjustment.

You can easily transfer shares (sell or buy), among yourselves. Put a shareholders agreement in place to prevent sales outside of your couple without consent.

If you decide to marry her, you'll need pre-nup ;)

Haha thanks Kevin. I appreciate your input. Do you think putting the house into the LLC raises any issues with the personal residence tax exemption if/when she sells the house? Also, for mortgage purposes do you know whether the bank would care whether the house was in an LLC or not? I'm assuming not as long as my GF remains liable on the mortgage.

Originally posted by @Jon Crosby:

Hi @Matt H., can't you just get an appraisal of the entire property post construction and then use % of square feet of the total property? Of which you would get half of that percentage?  

 Thanks Jon -- that was my best guess as to the best way to go about it but figured I would reach out to the experts on here to see if I might be missing something. Glad to confirm that you think thats a good way to go. Thanks!

Originally posted by @Matt M.:

Is your home properly zoned for an ADU? Have you ran the numbers? They cost at least $125k to start.

Thanks Matt M. -- yes the home is zoned for an ADU. Have not run full numbers yet but am estimating it could rent short term for about $150 a night in our area of Denver. Any recommendations on a way to get a firmer estimate? Have seen the site AirDNA but have not yet pulled the trigger on paying for their data. Also if anyone has any contractor/architect referrals for an ADU in Denver they would be greatly appreciated.

Hey everyone, I am new to the Bigger Pockets forums and have a question regarding a potential transaction. My girlfriend and I live together in a house that she owns. The home has a detached garage in back and is zoned for a possible ADU/carriage house. Our potential plan is to co-finance the construction of an ADU for short term rentals as 50/50 partners and then split the profits interest. This would all then possibly be run through an LLC to manage the short term rentals. The question we are having a tough time with is how to value the investment in the ADU relative to the total property. We are hoping for the best and planning for the worst. So, if something goes awry in the relationship and we break up, we want to make sure that we have an agreement in place which somehow tracks what my equity interest would be in the ADU relative to the total property. Thus, if she wants to buy me out or decide the sell the property we have a fair benchmark with which to evaluate my interest. Any thoughts on this would be greatly appreciated!

Hey everyone, I am new to the Bigger Pockets forums and have a question regarding a potential transaction. My girlfriend and I live together in a house that she owns. The home has a detached garage in back and is zoned for a possible ADU/carriage house. Our potential plan is to co-finance the construction of an ADU for short term rentals as 50/50 partners and then split the profits interest. This would all then possibly be run through an LLC to manage the short term rentals. The question we are having a tough time with is how to value the investment in the ADU relative to the total property. We are hoping for the best and planning for the worst. So, if something goes awry in the relationship and we break up, we want to make sure that we have an agreement in place which somehow tracks what my equity interest would be in the ADU relative to the total property. Thus, if she wants to buy me out or decide the sell the property we have a fair benchmark with which to evaluate my interest. Any thoughts on this would be greatly appreciated!

Hey everyone, I am new to the Bigger Pockets forums and have a question regarding a potential transaction. My girlfriend and I live together in a house that she owns. The home has a detached garage in back and is zoned for a possible ADU/carriage house. Our potential plan is to co-finance the construction of an ADU for short term rentals as 50/50 partners and then split the profits interest. This would all then possibly be run through an LLC to manage the short term rentals. The question we are having a tough time with is how to value the investment in the ADU relative to the total property. We are hoping for the best and planning for the worst. So, if something goes awry in the relationship and we break up, we want to make sure that we have an agreement in place which somehow tracks what my equity interest would be in the ADU relative to the total property. Thus, if she wants to buy me out or decide the sell the property we have a fair benchmark with which to evaluate my interest. Any thoughts on this would be greatly appreciated!

Wanted to introduce myself as a new member from Denver. Have an accounting and finance background along with a law degree, but no real estate experience, yet. Looking to build an ADU in Denver for short term rentals. Excited about all the educational resources available on BP.