All Forum Posts by: Seth McGathey

 Thank you! And yea, I guess I was conflating value and lendability. Thanks for the feedback! 

I thought with DSCR loans it made a big impact, regardless of the property type. Am I wrong with that? (I also don't know for sure if that is the route I will go, but I wanted to take it into consideration.) Also, I believe even outside a DSCR loan it still affects your loanability with other loans as well because it affects your Debt to loan ratio. (Although, I could be wrong on that since I am not actually getting that money).

As far as the PM side I am not confident in the value of that right now. I use rentometer to help me price the rents for my properties. With this one, I feel pretty confident I have it right because of the amount of interest I have received. I am getting 1-3 requests a day to see it. Some legit interest and some feel it is overpriced. So I feel I am right in the pocket I want to be in. But as I continue to grow my portfolio, I do intend to bring in a PM at some point. Especially on properties much more stabilized than this one. 

I own it directly. I actually just closed on it Wednesday so I have not filed taxes on it before. I have considered moving it to an LLC though as I am up to two rentals myself as well as one under a partnership.

But for this property I have a tenant that came with the property. She has already been great so far communication wise, she keeps the place spotless, and she has lived there 5 years, making me her third landlord while she has lived there. So I want to give her a bit of a break. But I also don’t want to devalue my property by undercharging. So I figured I would give her a few discounts to justify her rent being lower than whatever tenant I get in the second unit. (Her rent will still be going up, just not up $900 like it would have). 

In one of the podcast episodes, I remember them saying that if you are trying to avoid raising rents too high on an existing tenant, you are better off renting at the full amount you can and then giving them a discount on the rent. The idea was that it makes your property more valuable. But I wondered how this affects taxes.
Do I report the full amount I am "charging" and then somehow show that I collected less due to the discounts?
Or do I just take a small hit on my taxes because I am essentially claiming that I am collecting more than I am?
Or do I only report what I actually collected and ignore the fact that I am "charging" more? 

An example. The rent is $1500. I give the tenant a $100 discount if they handle the lawn care/snow removal themselves. So I only collect $1400 a month but they technically are being charged $1500 with a $100 discount. 

Even this seems like it could be done in a couple of ways. I could collect the full $1500 and then return the $100 each month. But that seems like a lot of busy work. I could also just only collect the $1400. 

Thank you!