All Forum Posts by: Victoria C.

Hi all, I recently listened to Bigger Pockets Money podcast - Oct 7th episode about CFPs (Certified Financial Planners). Lots of good information. Does anyone recommend a good fee only CFP in Sacramento, CA. (Bonus if they are a CPA and deal with rental properties). I’m looking to get a one time consultation to help strategize my goals and also deal with the new tax laws. TIA

Thank you Steve Vaughan & Shaun Patterson !

Hi All,

I'm a new landord and I have a property manager, and I know very little about taxes, but I know you can deduct a lot of the repairs & expenses, etc. I want to make sure I'm keeping my paperwork trail correct for when I file.

A few questions below:

1. My property manager tells me I need to repair the railings/deck on my back portch.  They gave me a few quotes and the payment will be deducted from the tenants incoming rent.  So the contractor will be paid through the property management and not through me.  Will this affect the tax deductions and how I would file?  Should I keep the repair payment directly through me or is it ok for the property management company to pay?

2. I know a handy-man/friend that isn't a contractor that can do the work for less $.  Can I have him do the repairs, and as long as I have a copy of the check payment transaction? (No receipt)

3.  I plan to turn my current primary residence into a rental, and I plan to paint the walls and do some misc. fixes before I leave.  Can this be deducted before a tenant comes in?  Is there a certain date that considers it a rental vs. primary residence? 

Thanks in advance!

Thanks all! Yes, I have much to learn about taxes. It was something I always dreaded and never really understood, but after I became a homeowner, a friend shed some light about all the benefits. If anyone can recommend a good accountant for a newbie in Sacramento, that would be great. I appreciate all the info thus far!

I'm a new landlord since April, and I've heard and lightly researched all the tax deductions you can have on your rental property, and it all sounds really good... but I feel like I'm missing something. They say you can deduct all maintenance, repairs, utilities, HOA, property management fees, mileage, home office, etc. If you can deduct all of those things and get that money back in taxes, why choose to do it yourself or go cheap on the fixes? I've heard people talk about the water expenses that the tenant uses up, swapping out the broken refrigerator for a used one instead of new, etc... but won't you get that all back in taxes? I wouldn't mind spending a lot on the repair if I knew I was going to get it back at tax time. Also, I'm looking to replace my windows and cast iron plumbing piping in the next 5 years or so. Can that be deducted or is that considered a renovation rather than a "repair"? This is for my rental in Sacramento, CA. Thanks in advance!

@Account Closed Great points and thank you for those articles! A $5,000 permit fee to operate an AirBnb makes a huge difference. I'm glad to see the city has taken that stance.

Originally posted by @Victoria C.:

Thanks all for the input! I notified my property manager and they sent in a warning notice right away, and the tenant agreed to stop and take down the posting and continue to finish out their lease as their primary residence. I saw on their listing that they have several other AirBnbs and have gotten great reviews, so this isn't their first rodeo. And to be honest, I've never seen my house look so good! They had 18 reviews just in the month of June alone, all 5 star ratings and majority of the reviews mentioned how clean it was. The house is not in a vacation area, but probably used for work conferences or to visit family... it was tempting to do an addendum to the contract for 25% of the profit and have the tenant take all the risk, but at the same time, I work 10+ hour days, and really don't have the bandwidth to keep track. But looking at the numbers, it would have been nice. This is the first property I bought and house hacked, and its kind of nice to see all the great input from the people that stayed there. They made it really nice, so I was a bit torn. If they were upfront and honest the first go round, it probably would have been a different story.

Thanks again for everyone's input!  I'm quoting my previous response since it looks like some have missed it.  I tend to agree with @Jerry W. and his point of view on being able to profit and learn from them. However, I do work a lot of hours and have no time to really get into it.  I never thought I would do AirBnB; however, I did listen to one of the BP podcasts and heard about the positive aspects of it, and so when this tenant's side business came about, it got my wheels turning. 

Also, another factor is that this is the first property I ever bought (Pre-BP) without the intention of getting much positive cashflow, but just to buy and become a homeowner with the possibility of renting it out.  It turns out that the rent just clears the mortgage, water/utilities and property management costs, so it's paying for itself, but no positive cashflow. I'm holding onto it for equity and possibly moving back to it. The idea of making profit is very tempting to me when I see it being AirBnB'd; however, after a few days of thinking about it, I'm happy with a stable long term renter, with the least amount of headaches.  Also, I do care about the neighborhood and would not like it being an AirBnB.  After this tenant's lease is up, I plan to raise the rent and possibly be my own property manager.  Right now, I have no contact with the tenant; it is all through the pm, and they handled it pretty well as far as notifying them that it's against the contract and would require a certified letter stating they will no longer sublet.  The tentant was very compliant and took the listing off that same morning.  As far as my fears of having a horrible tenant as a first time landlord, I would say this isn't a bad situation to be in.  Thanks all! I appreciate all the info.

Esther L. I think if you just ask your landlord and be upfront about it, they can choose how much they want to be involved. It would be a win since you're basically looking for tenants for them to pay the rent amount. The only thing that would rub me the wrong way is the secrecy about it.

Thanks all for the input! I notified my property manager and they sent in a warning notice right away, and the tenant agreed to stop and take down the posting and continue to finish out their lease as their primary residence. I saw on their listing that they have several other AirBnbs and have gotten great reviews, so this isn't their first rodeo. And to be honest, I've never seen my house look so good! They had 18 reviews just in the month of June alone, all 5 star ratings and majority of the reviews mentioned how clean it was. The house is not in a vacation area, but probably used for work conferences or to visit family... it was tempting to do an addendum to the contract for 25% of the profit and have the tenant take all the risk, but at the same time, I work 10+ hour days, and really don't have the bandwidth to keep track. But looking at the numbers, it would have been nice. This is the first property I bought and house hacked, and its kind of nice to see all the great input from the people that stayed there. They made it really nice, so I was a bit torn. If they were upfront and honest the first go round, it probably would have been a different story.

Thanks all for the warm welcome! Tobias Falzone I'm interested in flipping unoccupied homes, and really anything to gain experience. I eventually want to make $2500/month in passive income, but would like to get a few flips under my belt to be in a good financial position. My last condo purchase had me coming out of pocket on the down payment more than I would have liked to, so I'm looking to build up my savings a bit more, then go for the buy and hold. Kim Stofan Thanks for the warm welcome! I did see the Meetup in West Sac and do plan on going :) I'm hoping to invest in Sacramento, but if the numbers don't work out, I'm open to out of state, like Georgia or Arizona for buy and hold, and stick to Sacramento for flipping.