If you have high W2 income, the amount your STR makes (or loses) will be peanuts compared to the tax savings.

The builders loan couldn't approve us for the amount we need to get, but we had a loan broker find a loan for 10% down DSCR with a 2nd home status instead of investment home.

The IRS doesn’t allow both parties to claim the same interest amount, so clear documentation is critical.This post does not create a CPA-Client relationship.

You're right, I definitely do not want to force a bad deal just to avoid a relatively small amount in taxes.This morning, I spoke with the property assessor’s office in the county where my property is located.

that we’ve learned in our 24 years, managing almost 700 doors across the Metro Detroit area, including almost 100 S8 leases:Class A Properties:Cashflow vs Appreciation: Typically, 3-5 years for positive cashflow, but you get highest relative rent & value appreciation.Vacancy Est: Historically 10%, 5% the more recent norm.Tenant Pool: Majority will have FICO scores of 680+ (roughly 5% probability of default), zero evictions in last 7 years.Class B Properties:Cashflow vs Appreciation: Typically, decent amount of relative rent & value appreciation.Vacancy Est: Historically 10%, 5% should be applied only if proper research done to support.Tenant Pool: Majority will have FICO scores of 620-680 (around 10% probability of default), some blemishes, but should have no evictions in last 5 yearsClass C Properties:Cashflow vs Appreciation: Typically, high cashflow and at the lower end of relative rent & value appreciation.

These are by far the least amount passive so do your due diligence on understanding how to run a successful STR business and researching local laws on allowing STRs.2.

., the appraisal for 5+ is at least $2k-$3k) and the financing structure by lenders because Fannie/Freddie don't generally buy loans for commercial properties.So, for you personally, the biggest driver for the type of your next property is probably going to be the amount of a down payment/equity you can put in the property.

But if you get a major expense you could then potentially have a decent amount of debt.

It needed a pretty good amount of repairs in order to make it retail ready.

Back home I would make a packet for my appraiser and never had a bad appraisal due to the that I specified the value add and the Reno amount and broke it down so they saw the potential and it always worked.