Have you ever been a rental home owner?

This is the front porch of our forum. Pull up a chair, and talk about whatever's on your mind.
SandiSAHM
Posts: 2263
Joined: Fri Aug 28, 2015 11:46 am
Location: Oklahoma

Have you ever been a rental home owner?

Post by SandiSAHM »

I guess that makes a person a "landlord," even if there's a company in between doing the actual management, right?

At any rate... Much reading indicates that when you still have a mortgage on a home (in a hot midwest school district - rated #1 in the state) and decide to rent it, a whole bunch of things qualify as being deductible, tax wise. Mortgage interest, property tax, management fees, repairs.

Have you ever done it? If so, did you hate it?

Did you love it?

Would you do it again?

I emailed my tax accountant. That poor man, he's half-retired and I'm pretty sure he read what I sent him and gave serious thought to a full retirement in the Bahamas ;)
But don't really expect to hear from him inside the week, I don't exactly rank as a 'large' account for him. Nicest former IRS guy you'd ever want to work with, but still, bigger fish to fry.
Quilter51
Posts: 2815
Joined: Sat Aug 29, 2015 6:04 pm

Re: Have you ever been a rental home owner?

Post by Quilter51 »

I was was a homeowner who rented out the entire time I was in Germany, and now I rent my home from my brother.

First of all, that rent on the rental home is considered income, before you look at the deductions. I just want to make that clear. I'm unsure about the mortgage interest with the new laws. Repairs and all the other stuff, yes. And if you buy a home for the purpose of renting, or decide to refinance, be aware that your interest rate will be higher for an investment than for a home to live in.
icfrugal1
Posts: 2952
Joined: Fri Aug 28, 2015 12:54 am

Re: Have you ever been a rental home owner?

Post by icfrugal1 »

Probably not answering your question but...

I inherited my rental from my mother in 2002, it was paid for, since my mother inherited it from her father in 1945 or so.

But I have my deprecation, over 27.5 years by law, and I deduct the property taxes and insurance and expenses.

My understanding is that if I sell it then I have to pay taxes of 25% on the deprecation. (ask your accountant about that).

I'm lucky with my tenant.

I would look at landlord and tenant rights where you live, if you get caught in rent control it could change everything for you. There are some cities where if you want to move into your property you would have to pay your tenants to move out.

But over all it made sense for me to take the house rather then money when my mother died.

Enjoy!!!

IC
SandiSAHM
Posts: 2263
Joined: Fri Aug 28, 2015 11:46 am
Location: Oklahoma

Re: Have you ever been a rental home owner?

Post by SandiSAHM »

Quilter51 wrote: Mon May 21, 2018 10:53 amFirst of all, that rent on the rental home is considered income, before you look at the deductions.

And if you buy a home for the purpose of renting, or decide to refinance, be aware that your interest rate will be higher for an investment than for a home to live in.
Oh, yeah, the full amount of rent, any non-refundable deposits, all are income. I've been researching what's considered deductible to offset that. The fed appears to be incredibly generous that way, even the new 2018 laws are pro-landlord.

We already own it, so financing has been in place for years. I was just looking at it for a couple of years to wait out the forsakenly slow market.
GMPG54
Posts: 395
Joined: Thu Aug 27, 2015 9:50 pm

Re: Have you ever been a rental home owner?

Post by GMPG54 »

Didn't like it when we owned a 2 family in Staten Island,N.Y,a borough of NYC,granted it wasn't in the greatest of neighborhoods but I found the tenants very annoying,complaining, noisy...
Of course my kids were toddlers and my husband frequently worked 70-80 hour weeks so I dealt with a lot...
I still feel that it's looked at as an easy way to make money or get your mortgage paid but I think the headaches aren't worth it.
colonialgirl
Posts: 1835
Joined: Sat Aug 29, 2015 2:01 am
Location: Central Illinois

Re: Have you ever been a rental home owner?

Post by colonialgirl »

We rented our first home out when we moved to our second home. That was in the early 1980s so I am not sure my experience is still relevant Also I knew my tenant and was incredibly lucky. She was never even late one day with the rent and she rented it for the entire five years we had it.

We did not charge enough rent - we just wanted to cover our expenses. But even so, it was a huge financial windfall for us. The rent paid for mortgage, insurance and taxes plus a small amount for potential repairs. But the deductions for depreciations really saved us huge money on taxes. Our experience as very positive but I am not sure that is the norm.

Also - there was no "damage" but when they moved out the house was filthy. I could not believe they lived like that. I remember cleaning the stove and the thing I used the most was a small, sharp chisel to chip off the burnt on residue all over. Yuck!! But again we got lucky - we had a friend who wanted to buy it so we sold it without listing it or any help from a realtor. Lawyer at the time charged us $100.00 for the whole transaction. We doubled the money we paid for it in 7 years. All in all - great financial boon to us.
Post Reply