All Forum Posts by: Sam Li

@Bill Hampton Thanks Bill. I do plan to do that for the incoming year. For 2020 though, my case is relatively simple. For your suggestion, since I don't plan to report any income from the rental property, I assume here is nothing I can write off since it cannot be negative for non-real-estate-professionals. In such case, can I simply not report anything this year and carry it over next year for the expense of 2021?

Hi, folks. I am a new investor and I got a rental property in Texas. I did not rent it out last year since I got it in Dec. I've some cost incurred in 2020 such as loan points, agent fee for finding a tenant, etc, so my cash-flow in 2020 is negative for this property. 

1. Can the cost in 2020 be carried over to 2021 to deduct the rent I get in 2021? 

2. If the answer for question#1 is yes. Do I have to report this property for 2020 tax return so that the cost can be carried over? Or even if I did not mention it at all in my 2020 tax return, I can carry over the cost for my 2021 tax return?

Thanks

Sam

Thanks everyone for your comments. What would your recommendation for a new investor? We started with 2 rentals and are hoping for growing it to 10 in the next 3-4 years. Based on answers above, below is my understanding.

To start with, without too much work

(1) make sure that you don't play tricks and resolve all safety related issues

(2) get an umbrella insurance to cover you

After you''ve more properties or you don't mind putting extra work to be safer.

(1) set up a trust

(2) move assets or put the asserts into the LLC, and put the LLC under the trust. Put your family as beneficiary

(3) you should still get umbrella insurance as well as don't be negligible on issues  as mentioned above.

Does above sound right and anything to add on?

Thanks

Sam

@Dan M.Thanks Dan for your insights. I am wondering what would be defined as negligible. For example, if whenever the tenant feedback on an issue, we send someone to check and do repair as needed within a week, would that cover it in general? I am still wondering what's generally considered a landlord's fault. For example, if the tenant slipped inside the house by himself, would that be my issue?

Hi, I am new to BP and also new to real estate investment. We started to invest in rental properties earlier this year and under our personal name currently. I have been hearing about setting up LLC to protect your primary residence home to be impacted by rental properties, but was never clear about why it's needed or how it's done.

1. What types of issues will put your primary residence in danger? There are landlord insurance, renter insurance and also in the rental lease, I see lines stating that tenants should take responsibility if anyone is hurt in the house. Should not those put enough protection already? 

2. To set LLC, does it really isolate your primary residence completely? I have been hearing that's not necessarily the truth.

3. Once you start to have more properties, it looks better to have one LLC per property to completely limit max loss to the specific property if anything happened. Is that the recommendation if LLC is the way to go?

Thanks in advance,

Sam

@Alex D. do you mind give me the recommendation as well? We're starting to check Honolulu for some potential opportunities. Thanks!

@John Mocker Hi John. Thanks a lot for the details. Very informative!

@Ruth Geller Thanks Ruth. I do have a liability of 500k while the medical is only 5k. What does they cover differently and should we increase medical as well? 

@Sarah Brown Thanks Sarah! Is there some general guideline though, especially for the liability portion? That's more covering the tenants so I assume it should be more general? 

We recently started to invest in rental for single family houses and I am curious on what's general guideline on the rental insurance. Currently for a 250k single family(new construction we have), I get an insurance like below pic. 

(1) should dwelling match the home value in general?

(2) should medical payments be higher? 

(3) should liability be higher?

(4) what's your general requirement for the rental insurance that tenant will purchase?