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Thread: Rental Properties - New Buyer
03-26-2024, 11:40 AM
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#1
- 300Lane1
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Rental Properties - New Buyer
OK fellas, let's talk rentals. I am 42 and plan to retire at 55, at which point our plan is to move somewhere that doesn't have state income tax. What we'd like to do is purchase a rental now and rent it out until we retire and move.
I want to use a property management company, what do those fees typically look like?
On the accounting/tax side, are most of your guys with rentals running them as a business or what are you doing for profit/loss in terms of taxes at the end of the year?
Give me the in's & outs on our first rental.
I want to use a property management company, what do those fees typically look like?
On the accounting/tax side, are most of your guys with rentals running them as a business or what are you doing for profit/loss in terms of taxes at the end of the year?
Give me the in's & outs on our first rental.
03-26-2024, 11:54 AM
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#2
- HateLiberals
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- HateLiberals
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Mortgage 2500
Rent 2000
Solid plan op
Rent 2000
Solid plan op
03-26-2024, 11:58 AM
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#3
03-26-2024, 12:07 PM
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#4
- ~Hades~
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- ~Hades~
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Property manager is going to run you *usually* 8-10% depending on how much they do.
Your best option is to find an off market property to add value to thru repairs/updating. Second best option is MLS. Location is very important so that you can maximize natural appreciation while forcing appreciation with the updates/repairs.
Make sure you know rents in your area and work backwards from there to make sure you hit your return numbers.
As far as running it as a company, that’s going to vary on tax situation, state you live in, etc.
My dad has all of his in is name. I have all of mine in an LLC.
Your best option is to find an off market property to add value to thru repairs/updating. Second best option is MLS. Location is very important so that you can maximize natural appreciation while forcing appreciation with the updates/repairs.
Make sure you know rents in your area and work backwards from there to make sure you hit your return numbers.
As far as running it as a company, that’s going to vary on tax situation, state you live in, etc.
My dad has all of his in is name. I have all of mine in an LLC.
Royal Crew
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Festivus Cew
03-26-2024, 12:17 PM
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#5
- 300Lane1
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- 300Lane1
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Originally Posted By ~Hades~⏩
In terms of the business, you're using rent minus expenses as your profit?Property manager is going to run you *usually* 8-10% depending on how much they do.
Your best option is to find an off market property to add value to thru repairs/updating. Second best option is MLS. Location is very important so that you can maximize natural appreciation while forcing appreciation with the updates/repairs.
Make sure you know rents in your area and work backwards from there to make sure you hit your return numbers.
As far as running it as a company, that’s going to vary on tax situation, state you live in, etc.
My dad has all of his in is name. I have all of mine in an LLC.
Your best option is to find an off market property to add value to thru repairs/updating. Second best option is MLS. Location is very important so that you can maximize natural appreciation while forcing appreciation with the updates/repairs.
Make sure you know rents in your area and work backwards from there to make sure you hit your return numbers.
As far as running it as a company, that’s going to vary on tax situation, state you live in, etc.
My dad has all of his in is name. I have all of mine in an LLC.
03-26-2024, 04:05 PM
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#6
- TheScapeGOAT
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- TheScapeGOAT
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Originally Posted By ~Hades~⏩
A very excellent, informative post. I’d like to see more of these from you.Property manager is going to run you *usually* 8-10% depending on how much they do.
Your best option is to find an off market property to add value to thru repairs/updating. Second best option is MLS. Location is very important so that you can maximize natural appreciation while forcing appreciation with the updates/repairs.
Make sure you know rents in your area and work backwards from there to make sure you hit your return numbers.
As far as running it as a company, that’s going to vary on tax situation, state you live in, etc.
My dad has all of his in is name. I have all of mine in an LLC.
Your best option is to find an off market property to add value to thru repairs/updating. Second best option is MLS. Location is very important so that you can maximize natural appreciation while forcing appreciation with the updates/repairs.
Make sure you know rents in your area and work backwards from there to make sure you hit your return numbers.
As far as running it as a company, that’s going to vary on tax situation, state you live in, etc.
My dad has all of his in is name. I have all of mine in an LLC.
03-26-2024, 04:11 PM
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#7
- Destor
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- Destor
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From what I heard and my own research, the biggest thing property management companies do for you is vet the renters and I guess ensure you get paid every month. But I don’t think it makes a lot of sense for a single rental, depending on your risk tolerance of course. If you do it yourself, proper vetting is key.
So far I’ve been running mine just as a sole prop, slot the rent into your return as taxable income and deduct all the expenses. Again not sure if trying anything more complex is worthwhile for a single rental, but definitely not an expert there.
So far I’ve been running mine just as a sole prop, slot the rent into your return as taxable income and deduct all the expenses. Again not sure if trying anything more complex is worthwhile for a single rental, but definitely not an expert there.
03-26-2024, 04:14 PM
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#8
- samsbolton
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- samsbolton
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Originally Posted By 300Lane1⏩
You’re a sharp one aren’t you..In terms of the business, you're using rent minus expenses as your profit?
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03-26-2024, 04:23 PM
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#9
- 300Lane1
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- 300Lane1
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Originally Posted By Destor⏩
My problem is we wouldn't live even remotely close to the rental, so any service calls would be an issue, or am I over thinking that?From what I heard and my own research, the biggest thing property management companies do for you is vet the renters and I guess ensure you get paid every month. But I don’t think it makes a lot of sense for a single rental, depending on your risk tolerance of course. If you do it yourself, proper vetting is key.
So far I’ve been running mine just as a sole prop, slot the rent into your return as taxable income and deduct all the expenses. Again not sure if trying anything more complex is worthwhile for a single rental, but definitely not an expert there.
So far I’ve been running mine just as a sole prop, slot the rent into your return as taxable income and deduct all the expenses. Again not sure if trying anything more complex is worthwhile for a single rental, but definitely not an expert there.
Do you have more than one rental? I think my concern would be taking a loss for multiple years, but if you're including it in your personal taxes then I guess it wouldn't matter.
03-26-2024, 04:30 PM
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#10
- PaulJerome
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03-26-2024, 04:30 PM
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#11
- samsbolton
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Originally Posted By 300Lane1⏩
Seriously you sound stupid. Don’t do itMy problem is we wouldn't live even remotely close to the rental, so any service calls would be an issue, or am I over thinking that?
Do you have more than one rental? I think my concern would be taking a loss for multiple years, but if you're including it in your personal taxes then I guess it wouldn't matter.
Do you have more than one rental? I think my concern would be taking a loss for multiple years, but if you're including it in your personal taxes then I guess it wouldn't matter.
2023 bertie awards 2024 nominations
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03-26-2024, 04:30 PM
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#12
- Destor
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- Destor
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Originally Posted By 300Lane1⏩
Good point if you’re far away that might be big enough a factor to justify a property manager, that is a definite risk if you’re not able to swing by and check on things etc — don’t think you’re overthinking that, it’s legit.My problem is we wouldn't live even remotely close to the rental, so any service calls would be an issue, or am I over thinking that?
Do you have more than one rental? I think my concern would be taking a loss for multiple years, but if you're including it in your personal taxes then I guess it wouldn't matter.
Do you have more than one rental? I think my concern would be taking a loss for multiple years, but if you're including it in your personal taxes then I guess it wouldn't matter.
Nah I just have one detached house as a rental, have had tenants in there for like a year and a half now.
Are you able to deduct your full mortgage cost? Here in Canada you can only deduct the interest portion so it would be hard to have a net loss in a year unless it was just vacant. I pay for the utilities and internet on mine, so I deduct all that stuff but still definitely pay taxes on some of the income.
03-26-2024, 04:30 PM
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#13
- friesbruh
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- friesbruh
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generally 8-10% for longterm rentals
running as profit & loss, all expenses tracked, anything tax-deductible is added (automatic 6k in depreciation given each year by IRS in my case).
got tired of looking at everyone else's "figures" so i made my own spreadsheet. finished working on my own P&L statement a few weeks ago.
running as profit & loss, all expenses tracked, anything tax-deductible is added (automatic 6k in depreciation given each year by IRS in my case).
got tired of looking at everyone else's "figures" so i made my own spreadsheet. finished working on my own P&L statement a few weeks ago.
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03-26-2024, 04:31 PM
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#14
03-26-2024, 04:34 PM
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#15
- 300Lane1
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- 300Lane1
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Originally Posted By Destor⏩
Only the interest, but I was thinking in case of doing a remodel and didn't have tenants for an extended period of time.Good point if you’re far away that might be big enough a factor to justify a property manager, that is a definite risk if you’re not able to swing by and check on things etc — don’t think you’re overthinking that, it’s legit.
Nah I just have one detached house as a rental, have had tenants in there for like a year and a half now.
Are you able to deduct your full mortgage cost? Here in Canada you can only deduct the interest portion so it would be hard to have a net loss in a year unless it was just vacant. I pay for the utilities and internet on mine, so I deduct all that stuff but still definitely pay taxes on some of the income.
Nah I just have one detached house as a rental, have had tenants in there for like a year and a half now.
Are you able to deduct your full mortgage cost? Here in Canada you can only deduct the interest portion so it would be hard to have a net loss in a year unless it was just vacant. I pay for the utilities and internet on mine, so I deduct all that stuff but still definitely pay taxes on some of the income.
03-26-2024, 04:49 PM
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#16
Originally Posted By 300Lane1⏩
You're goal should be to run as close to zero net as possible.My problem is we wouldn't live even remotely close to the rental, so any service calls would be an issue, or am I over thinking that?
Do you have more than one rental? I think my concern would be taking a loss for multiple years, but if you're including it in your personal taxes then I guess it wouldn't matter.
Do you have more than one rental? I think my concern would be taking a loss for multiple years, but if you're including it in your personal taxes then I guess it wouldn't matter.
03-26-2024, 04:54 PM
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#17
03-26-2024, 04:55 PM
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#18
03-26-2024, 05:02 PM
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#19
03-26-2024, 05:07 PM
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#20
- Destor
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- Destor
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If you’re not mortgaging rentals, you’re missing out on all sorts of benefits.
Even if I had $20million in paid off property, I would use that as leverage to mortgage more properties.
Even if I had $20million in paid off property, I would use that as leverage to mortgage more properties.
03-26-2024, 05:07 PM
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#21
Originally Posted By 300Lane1⏩
Asking questions this basic shows you haven't done even an ounce of research and you're not gonna take any action. Daydreamer nonsenseOK fellas, let's talk rentals. I am 42 and plan to retire at 55, at which point our plan is to move somewhere that doesn't have state income tax. What we'd like to do is purchase a rental now and rent it out until we retire and move.
I want to use a property management company, what do those fees typically look like?
On the accounting/tax side, are most of your guys with rentals running them as a business or what are you doing for profit/loss in terms of taxes at the end of the year?
Give me the in's & outs on our first rental.
I want to use a property management company, what do those fees typically look like?
On the accounting/tax side, are most of your guys with rentals running them as a business or what are you doing for profit/loss in terms of taxes at the end of the year?
Give me the in's & outs on our first rental.
03-26-2024, 05:17 PM
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#22
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