Tax Strategy: Making the 2017 tax cuts permanent to stimulate investment and consumptionMarket implications under Trump include potential for accelerated price growth in existing homes, increased private sector development opportunities, and more flexible lending standards through GSE privatization.Similarly, clever allocators of capital may want to focus on market rate housing and more aggressive development opportunities while considering GSE privatization impacts under a Trump administration.Regardless of who you support or which way you lean, both candidates acknowledge the need for increased housing supply.

And, as a Condo project everyone is sharing in the water bill by allocation of the HOA fee which should be increased if common area expenses have risen.

In my experience, the 50% rule would include vacancy, management fees, capital allocation, etc.

Not without the following details:1. tax residency, and location of the physical asset for nexus allocation calcs2. personal tax filling status3.

Specifics such as build-out costs and how they were allocated, lease term (5/10 years), NNN vs Gross, etc would be super helpful. 

The way to handle it is to allocate expenses based on the percentage of the home’s square footage used for rental purposes.Here’s how it works:Calculate Rental Percentage: Add up the square footage of both the in-law suite and the rented room, then divide by the total square footage of the house.Apply This Percentage: Use this rental percentage to deduct a proportionate share of expenses like repairs, utilities, and mortgage interest.This post does not create a CPA-Client relationship.

Quite a steal and they get snatched up pretty quickly but if you crunch the numbers, even with the high interest rate you get pretty close to cutting even on your rent (after you allocate X amount to unforeseen property costs)

@Richard Chang,  Your basis (read that gain) goes forward as an allocation into each of those properties.  

Even if there has been no vacancy, vacancy needs to be allocated as there will almost certainly be a vacancy. 

@Evan Polaski yes the cash that I’ve allocated is going into low volatility liquid securities that also generate some yield.