All Forum Posts by: Tracy M.

Happy Friday, folks.  I own a 1972 duplex that's had ongoing plumbing back-ups.  The cast iron sewage pipes are done for and the only permanent fix is to replace the entire system with PVC.  Excavation adds a huge cost, so I've gotten multiple quotes that have all come out between $20k and $40k. 
I don't plan on selling any time soon, so I'm prepared to bite the bullet and get it done, and will probably finance the cost with the plumbing company to avoid spending cash.  

Questions:

1) Does something like this count as a "repair" (tax deductible) or "improvement" (which I believe adds to my cost basis, but isn't tax deductible)?

2) If repair:  The financing would be for three years.  Do I: 

     a. deduct the actual amount being financed the year that I do the repair (e.g. 2022) OR

     b. deduct the amount paid to the finance company (including principal & interest) each year over the three years?

3) If improvement: Do I:

     a. add the actual cost of the work to the cost basis the year that I do the repair (e.g. 2022) OR

     b. add the amount paid to the finance company (including principal & interest) each year over the three years?

Any input appreciated!  Thanks in advance! 

@Bret N. "Affinity" brings up a lot of Google results. :-)  I'm not finding one that resembles this type of insurance. Can you share the link to their website or, if not allowed, the full name and location of the company?  Thanks! 

I purchased a duplex in 2015. At the time, both units were leased at $450, which was low even for the area at that time. I've raised the rent a couple of times so the long-term tenant who was there when I bought the place and the other tenant who moved in in 2016 now each pay $600.  Over the past few years, the area has become very hot and with real estate prices up, comparable rents in the area are now around $1100.  My tenants are great, we have a good relationship, it's not my intention to gouge them, and I'd like to keep them. Both leases are up for renewal early next year (no, that wasn't planned and isn't preferable) so I want to give them a heads up before the holidays that rent will be going up. My question is, what's appropriate to be fair to them but also start moving closer to comps? $700 would still be a great deal for the area, but that's a ~17% jump and feels like it might be too much. $650 and let them know it will go up $50 every year for a while? 

I've read that a 2-3% annual increase is common and would probably land there once I get closer to market rates, but I'm so far below those right now that I'd never close the gap with that. I'm sure many others have managed through similar situations, and would appreciate your experience and advice.  

Thanks! 

You may have already talked to them, but I discussed 4plexes with Supreme Lending earlier this year and they'll finance as investment property on 1-4 units and refer you to commercial at 5+.