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Updated over 5 years ago on . Most recent reply

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Adam Craig
  • Investor
  • Cleveland, OH
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Renting office space from myself. How much to charge ?

Adam Craig
  • Investor
  • Cleveland, OH
Posted

We are closing on a 7 unit office building next week. The building is completely vacant so I am purchasing it with private investors funds. I'm going to do about a $20,000 rehab then get at least up and try to refinance it quickly.

I'm going to use one of the spaces for my new office on my real estate business. I have a second business that I am contemplating moving into one of the lower units. My thinking is if I can get two tenants immediately (which would be both my businesses) then I am well on my way to getting it refinanced because I only have to fill a few more units before I bring it to the bank.

the question is how much should I charge myself for rent? I initially thought well below market rents but now that I am wanting the numbers to look good for the banks should I just charge market rent since the payment will be going to my business?

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JD Martin
  • Rock Star Extraordinaire
  • Northeast, TN
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JD Martin
  • Rock Star Extraordinaire
  • Northeast, TN
ModeratorReplied
Originally posted by @Zach Quick:

@Adam Craig Market rent. Otherwise you're shooting yourself in the foot on an appraisal. 

 Exactly. You also want to be paying whatever market rates are for tax purposes. Doing anything else could give the appearance that you are trying to circumvent legitimate tax burdens. 

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Skyline Properties

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