Owners cannot recoup these costs through higher rents, meaning they are effectively being penalized for trying to improve their properties.Instead of discouraging responsible property owners who follow the permitting process and invest in meaningful upgrades, we should be focusing our efforts on ensuring that all renovations are done legally and safely.

Hi Eli, This is a creative and potentially win-win strategy that could work well in the right situation.

By identifying the right buyer in advance, we streamlined the process and ensured a smooth closing.

•Document everything – Ensure the transaction is structured at fair market value, with no special benefits to any family members.Bottom LineIt may be possible, but because of the family connection, the IRS could scrutinize the exchange.

Ensure they’ve successfully completed similar projects on time and within budget.

What are some creative ways you’ve monetized land while holding (e.g., leases, easements, or partnerships)?

Be sure to shop around for the best terms and understand the refinancing process post-rehab to ensure your numbers work.

The key is vetting your lender properly—asking the right questions, understanding the terms, and ensuring the numbers make sense for your strategy. 

My goal is to acquire my first investment property, ideally a single-family rental, by early-2025.I’m particularly interested in hearing from others who’ve navigated the Hudson Valley or Catskills markets, especially with rental properties or creative financing strategies.

Additionally, the study must be completed by “qualified individuals” and “professional firms” that are competent in construction, design, auditing and estimation procedures for building construction.So while a specific methodology isn’t required by the IRS, taxpayers must ensure that their depreciation deductions and classifications of property are substantiated with supporting evidence.