Hey! Just curious what everyone is doing/has done in the past with rent. Did you file the income on your tax returns? I’ve been house hacking for 1.5 years and have never reported it. After talking with a bank..I now see there are some pros—for example when applying for a new loan, 100% of that rental income can be reflected as income (opposed to 0% if you have no documentation or only 75% if you have a signed lease).
@Justine Scheuher the con, of course, is that you will be taxed on that income. But the bigger, and more important pro, is peace of mind.
Not having to look over your shoulder in RE investment is invaluable. Being a landlord comes with enough stress on it's own.
Side benefit: It's been my experience that it will be much easier for you to grow and get more loans when you have more reported income on your tax returns.
Well there are a bunch of tax deductions that you can take with house hacking . I wrote off 2/3 of my house as depreciation, my mortgage, part of my phone bill since I used it for “work”, all my cleaning supplies, my heat/electricity/water/trash and internet, and all of my home improvements. So I ended up paying less in taxes than I would of if I didn’t get all those deductions. Basically anything you use for the house hacking is a write off.
There Are so many things that you can legally write off when you have a businesses that it will actually start cutting into your W2 for your day job. You can even write off clothes that you buy, since you have to look a certain way for work.