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SlapActionJackson posted:Yes, I've done that. Selling process is no different, but the tax treatment can get a bit tricky depending on your specifics. That's exactly what I had questions about, specifically depreciation recapture. Here are some approximate numbers: Original purchase price: 325k Depreciation taken since conversion: 50k Anticipated selling price: 310K Since the difference between the adjusted cost and the sale price is 35k I would pay .25 depreciation recapture tax on the 35k vice the 50k. Is this correct? Also, I am selling person to person, no agents involved. What is the best way to ensure I dont screw up the paperwork or any other part of the process?
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Dec 31, 2015 22:08
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vulturesrow posted:Also, I am selling person to person, no agents involved. What is the best way to ensure I dont screw up the paperwork or any other part of the process? Hire a real estate closing attorney to handle it. Should be like $300-500 for a professional to represent your legal interests in the sale.
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Dec 31, 2015 22:17
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vulturesrow posted:That's exactly what I had questions about, specifically depreciation recapture. Here are some approximate numbers: Yes, you only pay depreciation recapture tax on the depreciation you actually capture. The tax rate is your ordinary marginal rate. vulturesrow posted:Also, I am selling person to person, no agents involved. What is the best way to ensure I dont screw up the paperwork or any other part of the process?
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Dec 31, 2015 22:52
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Follow on question: Does anyone have experience with section 1031 exchanges? I dint know much about them but seems it might be an avenue to not have to pay the depreciation recapture.
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Jan 1, 2016 19:59
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vulturesrow posted:Follow on question: Does anyone have experience with section 1031 exchanges? I dint know much about them but seems it might be an avenue to not have to pay the depreciation recapture. That is definitely a lawyer/accountant question for the first time you do it. You wouldn't have a depreciation recapture in that case, but you would have a lower base to depreciate the new property if I recall correctly.
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Jan 1, 2016 20:12
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poopinmymouth posted:Was asked to join in the thread by the OP. Update for the new year. Primary residence: Mortgage free (took 5 years) gone up about 40% in value in that 5 years. We would not have been able to pay it off this quickly without the rental income from the guesthouse and secondary apartment. Guesthouse at primary residence: Long term renter, pays on time, pure profit Rental Apartment: Owe just under the full purchase price, used primary residence for collateral, 3.6% inflation adjusted mortgage Long term renters inherited from previous owner, pays on time, rental payments 200% mortgage payments New acquisition: undeveloped land in my home state to build a vacation home we will rent out the rest of the year. Bought in cash. Total monthly expenditures are currently completely covered by rental income, but only just so. We want to add one more property before early retirement, but that is up in the air. It's between another small apartment here to rent out, buying an apartment here we would live in and rent out our much larger primary residence, or finishing the vacation home (the third option will take much longer to complete but has a much higher ROI based on the house size and area). Currently funneling all extra money into paying down the mortgage on the rental apartment so that we will be good candidates for a loan for the next stage of our plan, whatever that may be. poopinmymouth fucked around with this message at 13:33 on Jan 3, 2016 |
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Jan 3, 2016 13:24
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You really really don't want to pay off or pay extra on your mortgage when you're in an environment where prices are appreciating. Having leverage on an asset that is increasing in value is incredibly lucrative and if you're lucky enough to be in this situation DO NOT pay an extra cent towards your mortgage. Take any extra money and invest it in companies that aren't based in in your area instead, it's a much better strategy. The real estate market in your area is driven largely by the performance of the biggest employers in your area, make sure you're not investing in them out of some silly misplaced source of local pride, they will both tank with a high degree of correlation together.
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Jan 11, 2016 18:09
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Yo I got a question that seems relevant to this thread, I've got a landlord asking me to add him as an additional insured. I added him as an additional interest so he's notified if the policy is canceled but apparently this wasn't enough and he told me that he needed to be added as "additional insured" which seems odd to me because a. that seems like a category for someone who's living in my unit and b. he should have his own property insurance if someone names both of us in a lawsuit rather than making my policy cover him. He just reiterated without explanation when I asked for reasoning so I'm wondering if I'm jumping into a bad situation if I add him as an additional insured.
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Jan 15, 2016 01:23
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Control Volume posted:Yo I got a question that seems relevant to this thread, I've got a landlord asking me to add him as an additional insured. I added him as an additional interest so he's notified if the policy is canceled but apparently this wasn't enough and he told me that he needed to be added as "additional insured" which seems odd to me because a. that seems like a category for someone who's living in my unit and b. he should have his own property insurance if someone names both of us in a lawsuit rather than making my policy cover him. He just reiterated without explanation when I asked for reasoning so I'm wondering if I'm jumping into a bad situation if I add him as an additional insured. Tell him no thank you, your renters insurance exists to protect you and your property, not him. There's no good reason for you to add your landlord as a named insured and it can cause big problems if you actually do get into a claim situation involving your landlord, such as a fire or flood on the property.
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Jan 15, 2016 02:29
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I thought there was a difference between additional insured ("Additional insured endorsement" is the exact verbiage he's demanding) and named insured. This is also unfortunately not something I can just say "No thank you" to without breaking the lease and just moving out entirely unfortunately.
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Jan 15, 2016 03:03
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I've had to do it for the apartments I rent in, but I talked with my parents' insurance people about it before I did. If you have an insurance person that you or your family deal with and trust, I would check with them.
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Jan 15, 2016 03:32
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Control Volume posted:I thought there was a difference between additional insured ("Additional insured endorsement" is the exact verbiage he's demanding) and named insured. This is also unfortunately not something I can just say "No thank you" to without breaking the lease and just moving out entirely unfortunately. There is: http://www.csac-eia.org/pdfs/NamedInsured_vs_AdditionalInsured.pdf If you've agreed through the lease to indemnify him, then listing him as an additional insured is appropriate, though I've never heard of this as part of a residential lease.
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Jan 15, 2016 03:35
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Pryor on Fire posted:
I thought I'd covered it before, but to reiterate, we have currency controls here in Iceland. That means I cannot move any significant amounts of money outside of the country. The stock market here in a nation of only 320,000 people is far too volatile for someone so risk adverse as me. This leaves either putting money into a savings account (and risking another period of hyper inflation like we've had frequently) or parking it in real estate. Many local economists actually predict the reason house prices are going up so much is because so many other people have the same idea, that real estate is the safest hedge against risk. I appreciate the advice, and it's probably apt in most people's situations, but we went over all our options with some local financial planners, banker friends, friends who have also dabbled in real estate, and then crunched the numbers ourselves. This is the lowest risk route forward to saving for retirement that *we* have available here in Iceland. Additionally none of our plans rely on the net worth of our properties, they have all been researched and planned for as rental properties outside of our primary residence which we also never plan to unload. I mention property appreciation just as a fun aside, not as pertinent information to our planning. But really, having multiple payed off mortgage free properties with good tenants paying on time sounds like a great situation to me. Far more in line with what I want to risk than multiple properties with debt owed and me trying to juggle all the balances if money ever becomes tight or an emergency arises. poopinmymouth fucked around with this message at 13:57 on Jan 17, 2016 |
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Jan 17, 2016 13:53
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I'm sure you're set and way better off than most people, but you can't just buy an index fund or ETF or whatever that consists largely of international diversified holdings? You don't need to transfer money to a foreign account to do that hopefully, surely etrade or something similar offers accounts in Iceland yes? I heard some crazy stories about hooker orgy parties in Iceland circa 2002 but aside from that my knowledge of the country is zero.
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Feb 1, 2016 21:22
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Pryor on Fire posted:I'm sure you're set and way better off than most people, but you can't just buy an index fund or ETF or whatever that consists largely of international diversified holdings? You don't need to transfer money to a foreign account to do that hopefully, surely etrade or something similar offers accounts in Iceland yes? I heard some crazy stories about hooker orgy parties in Iceland circa 2002 but aside from that my knowledge of the country is zero. You generally can't purchase foreign currency as an Icelander and an ETF could on that theory only purchase foreign securities that were for sale on a market denominated in ISK. Even if such a market existed with enough liquidity to value an ETF it wouldn't accomplish the purpose of hedging extreme currency risk volatility related to the ISK.
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Feb 1, 2016 21:39
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poopinmymouth posted:I thought I'd covered it before, but to reiterate, we have currency controls here in Iceland. That means I cannot move any significant amounts of money outside of the country. The stock market here in a nation of only 320,000 people is far too volatile for someone so risk adverse as me. This leaves either putting money into a savings account (and risking another period of hyper inflation like we've had frequently) or parking it in real estate. An "efficient" portfolio would include some portion of risky assets (like randomly chosen stocks or the icelandic equivalent of an index fund) and then balance that risk with relatively safer assets such as highly rated bonds -- the ratio between them approaches whatever you want to declare your risk tolerance to be. "efficient" here means highest expected return for a given amount of risk
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Feb 8, 2016 09:28
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ShadowHawk posted:A stock is very risky, many stocks much less so. A single rental property is risky, a share of an REIT much less so. I would love to buy shares in an REIT and the moment the currency controls are lifted, that is how we plan to diversify. Icelandic stocks are so much riskier than real estate that we'd rather pay off our current mortgage in order to buy another. (which is the current plan) I really appreciate everyone's attempt to help, but the specifics of living in Iceland under currency controls and such a minuscule interior stock market makes individual real estate purchasing really our only option. At the moment at least. In bad news, we found out the rental property needs the entire outside of the house redone, and the initial contractor suggested it might even be "too late" (which I think personally is a scare tactic, but we'll see!). Icelandic houses are poured concrete with rebar, and the house has quite a lot of outside damage. We had an inspector come before buying, but he focused mainly on the interior of the apartment. The initial estimate is about 160k USD and our share would be about 20k. The house association only has about 4k in the coffers. If we finance, the monthly payments on the loan would still be covered by the rental income, so we'd be either breaking even or still pulling in a small monthly gross. Frustrating, but not really a huge deal. If anyone is interested, here is the album of images we took to provide to the various contractors to give them an idea of the level of damage: http://imgur.com/a/7w4xs (ours is the very top apartment) poopinmymouth fucked around with this message at 12:25 on Feb 11, 2016 |
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Feb 11, 2016 12:18
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I recently got my first renter for my property. He and his fiance are moving across the country for a job. They are moving in after their first day of the lease begins (March 1st, going to be here in PA on March 2nd). Should I have them sign the lease beforehand and send money? What is the best option?
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Feb 21, 2016 15:39
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politicomama posted:I recently got my first renter for my property. He and his fiance are moving across the country for a job. They are moving in after their first day of the lease begins (March 1st, going to be here in PA on March 2nd). Should I have them sign the lease beforehand and send money? What is the best option? Sign the lease and send money or the lease is not valid. Renters will lie and change their plans on you unless you make them commit financially and put a price on wasting your time or costing you lost rent.
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Feb 21, 2016 17:12
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Didn't see a renting thread so I figured I would post here. We bought a house and let our landlords know 11/4. And then on 12/4 we told them would be out by 1/15. The lease we signed goes through March. We took really nice photos of the house and sent them to our landlords for them to put on craigslist. And we left the property in really good condition on 1/15. Landlord said he will be sending us our deposit. The landlord decided he wanted to have a small amount work done on the house in between tenants, but didn't get around to getting a contractor in to work on the place until 2/22. Our state says that a landlord has to make a good faith effort to fill the vacant property. The property still isn't on craigslist. Is it reasonable for me to inform our landlord that February was our last payment?
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Feb 29, 2016 13:29
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Hashtag Banterzone posted:Didn't see a renting thread so I figured I would post here. We bought a house and let our landlords know 11/4. And then on 12/4 we told them would be out by 1/15. The lease we signed goes through March.
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Mar 1, 2016 06:51
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SiGmA_X posted:You probably should post the state and what your lease break terms are in the lease. Ohio and there weren't any break terms in the lease. I should've just told our landlords we were putting the house up on craigslist before we moved out. In the area it's in someone would've signed a new lease within a week or two.
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Mar 1, 2016 16:11
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I'm confused by your first post. You gave your landlord notice that you're going to be moving. If you're moving before the lease is up you're still responsible for paying rent until the lease ends. Unless there's some release in the lease agreement you're still on the hook. You might be able to work with the landlord to get an early release or a discount on what you owe but that is at the discretion of the landlord. If you're not breaking the lease and you're moving after the lease is up then there's any number of reasons why the landlord isn't looking for a new tenant but that's their problem and not yours.
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Mar 4, 2016 14:55
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TouchyMcFeely posted:I'm confused by your first post. In Ohio the landlord has to make reasonable efforts to re-rent the unit if you break the lease. Personally I don't think waiting a month to reach out to a contractor to have some quick nice-to-have work done that wasn't needed, and not bothering to put the house up on craigslist during that time counts as a "reasonable effort". But of course I'm biased.
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Mar 4, 2016 15:56
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The landlord's contractor could have been busy sooner, or they were pricing out contractors. Lots of variables to consider.
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Mar 6, 2016 22:59
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Mercury Ballistic posted:The landlord's contractor could have been busy sooner, or they were pricing out contractors. Lots of variables to consider. This goes to "reasonable" which is a squishy concept. My gut reaction would be that 5 weeks without re-advertising doesn't seem reasonable, unless the other poster trashed it on the way out, making it unable to be re-let. You can show an apartment that will be available a couple weeks in the future, after you do the painting or whatever. It's not fair to a renter for a landlord to say "Well, I know you vacated early in August, but I had my brother-in-law booked to repaint the place in December after the lease officially ended, so you can go ahead and pay me for those 4 months". That defeats the purpose of the law/regulations that are meant to protect renters.
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Mar 6, 2016 23:07
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Devor posted:This goes to "reasonable" which is a squishy concept. Pretty much this. The answer depends on what the courts have interpreted "reasonable effort" to mean in your jurisdiction. Hashtag Banterzone, you'll be better off asking a tenancy lawyer or at least a legal aid clinic that knows the specifics of Ohio case law on this.
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Mar 6, 2016 23:48
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TouchyMcFeely posted:As I'm getting close to closing on my first rental I'm interested in resurrecting the talk about advertising available units. This is a bit of an old post, but hopefully this is helpful to some of you landlords: My landlord only advertises on a physical bulletin board at the university, over in the building where the international students have class. I reckon it's a good way to subtly screen clients without opening yourself up for the possibility of a discrimination suit. Only want a Catholic tenant? Limit your advertising to the bulletin board outside a Catholic church, etc. Bonus points if you only put the listing in a certain language; I can read a bit of Chinese/Japanese and see stuff up around town every now and then. The bad news is I think he does this because he can kinda take advantage of them (or rather, "us", in this case) not being familiar with local tenancy laws. He collected a bond from me himself, which as it turns out is illegal here, it's supposed to be turned in to a government body, who mediates all these things.  When I moved in he said he'd refund it as long as I gave 4 weeks notice (open ended without a contract), which sounded like a sweet deal at the time not knowing what my needs were going to be... until I found out the process for breaking a lease here really isn't that bad at all, I probably could have done better elsewhere. Have a meeting with the free student legal advice people tomorrow to figure out what my rights are, as I'm moving out as soon as I can find a new place (he's moved in a married couple on short notice after telling me for months I'd have the place to myself from next week). I don't think he will try to keep the bond even though I'm giving him less than 4 weeks notice*, as the new tenants are paying substantially more rent than I do, and this windfall is supposedly only being done as a last-minute favour to a colleague, so he can't argue that I'm costing him anything in terms of vacancy. *I got less notice than this that the new people were coming, and he knew that adding more people to the place would be a dealbreaker for me. Question for landlords: is "no pets" a dogwhistle for "no dogs"? My partner is coming at the end of the month and has a cat, which seems to be disqualifying us from a disproportionate number of places. Not that there aren't lovely cats out there, but I feel like I'd rather take my chances with a cat over a random person as far as property damage. On the flipside of that is a place I went and looked at last week, where the barely-adult tenants had 2 young dogs, 2 cats, and a rabbit in a 2BR. The carpet was... as you'd expect. Actually considering it because the location is great, they allow pets, and it's going to get professionally cleaned at the current tenants' expense due to the havoc their menagerie has wrought.
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Mar 7, 2016 11:55
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I listed my place as "no pets" and absolutely would have turned down a cat owner. Cats puke, poo, and tear up things just as easily as dogs can. I can afford to be picky, though.
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Mar 10, 2016 17:23
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Nocheez posted:I listed my place as "no pets" and absolutely would have turned down a cat owner. Cats puke, poo, and tear up things just as easily as dogs can. I can afford to be picky, though. Cats also have the most corrosive, permanent death piss. If they piss in the house due to sickness or senility you just have to burn the place down and start over.
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Mar 12, 2016 07:24
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TouchyMcFeely posted:I'm confused by your first post. The landlord said he'd send them the deposit at one point. I can't imagine a scenario where this is anything other than releasing them from their lease.
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Mar 12, 2016 15:54
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Anyone here let pets in when the carpet gets older? My carpet is 11 years old and it took me 2-3 months to find a tenant, but I had to go back on my original no pets requirement just to get some applications. My current tenants have a small dog, so I'm not too worried about it. I'll go back to a strict no pets once I tear the carpet out eventually.
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Mar 22, 2016 21:49
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I now allow pets with a hefty fee and pet rent, it didn't take me long to find out that tenants will just lie about not having animals in my rental property. The SFH with a fenced in backyard is just too tempting to treat me like I was born yesterday and I'm not going to find out you have a dog, I guess.
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Mar 22, 2016 23:53
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We opted to allow pets and just have a higher than normal rent and deposit. Whether the tenant actually has pets has no bearing on the rent and it avoids the issue of them trying to sneak one in without our knowledge to save money or avoid a no-pet policy. We also came to realize that the number of "service animals" in the world today makes having a no-pet policy really difficult. In Utah, pet rules don't apply to service animals so you're likely to end up with a dog or miniature pony whether you really want one or not.
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Mar 23, 2016 01:03
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Yeah, forgot to mention that I bumped up their deposit. Same rent though.
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Mar 23, 2016 02:11
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As it would happen, the people with the menagerie I posted about actually found a new place, so I should be moving in there (once the carpets are cleaned, and the leasing agency has checked for any further damages). Fair enough on the "no cats too", I sort of had two growing up (basically shared indoor/outdoor cats with the neighbours) and they were way more low maintenance than the dogs of my acquaintance. Then again, both got killed before they got to old age, and spent most of their time outside, so I probably had a rosy notion of how chill they were. When I was looking at listings on Gumtree (Australian Craigslist, where I ultimately wound up finding the lease break I'm going with), I just looked at everything under "real estate" within a 10km radius, as people can't seem to categorise stuff to save their lives. I came across "housing wanted" ads where people described themselves as "house proud", which is probably the only bit of Australian English I've really taken a disliking to so far. I don't know why, it just sounds so tacky and redundant (of course you're going to tell landlords you're not going to smash up their place). Had to pass up some sweet places due to either the cat existing or my partner not being able to drive: one was a former Chinese restaurant (had residential suite in the back, empty shopfront up the front that'd make an awesome sun porch), another was a stone convict-built house that was probably 150+ years old. The latter probably would have been dire to heat in the winter, but it looked cool as hell. The place we're moving into has that pseudo-carpet stuff in the kitchen, sigh.
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Mar 23, 2016 11:21
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6 months in and my tenants managed to destroy the garage door! They noticed a roller had come off track, but didn't call to have me come look at it and fix it. Then the counterbalance metal wire got tangled in the shaft and they tried to fix it themselves. After loving it all up, they finally call me. There was nothing I could do but cut the wire and get the door mostly shut. There goes $1400 for a door and a new opener, whee!
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May 4, 2016 16:52
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Nocheez posted:6 months in and my tenants managed to destroy the garage door! They noticed a roller had come off track, but didn't call to have me come look at it and fix it. Then the counterbalance metal wire got tangled in the shaft and they tried to fix it themselves. After loving it all up, they finally call me. There was nothing I could do but cut the wire and get the door mostly shut. There goes $1400 for a door and a new opener, whee!
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May 5, 2016 21:40
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Thought I would provide an update on my situation. Landlord ended up getting the house on craigslist at the end of March. They had a contractor refinish like 500 sqft of wood flooring, replaced a bathroom countertop and remove some wallpaper. I asked him to waive March's rent since we didn't have control over his contractor taking longer than expected. He countered by asking us to pay 1/4 of March's rent and thats what we did. So it more or less worked out. I guess in hindsight I could've asked "Are you going to get the house right back on the market or do you plan on doing some improvements?" prior to moving out and that might have helped clear things up. I still feel a little salty that I paid for 7 weeks of renovation planning and work, but it's not that big a deal in the grand scheme of things.
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May 5, 2016 21:57
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SiGmA_X posted:Your lease probably states something about they can't do repairs and must report things immediately, right? If so, what protections does that actually afford you?
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May 5, 2016 22:14
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