Looking to confirm if I am getting this right.
If you can time your leases to end in spring.. (better weather for Tenants and Contractors) and you need to rehab a bit before renting/leasing out the unit, you still need to advertise the unit for rent and proses applicants to keep the unit 'in service'?
This keeps the work expense in 'operational' (and thus can Wright off this year)
Or, If the unit is not in service then the work will be added to the deprecation on the prop?
Might be to broad a question. Serenly there are matters of degree here.
This sounds like you're assuming that the work will take an extensive amount of time between tenants if I'm understanding your question correctly. More often than not, I can turn a property in a weekend, a week at worst. This typically covers paint and whatever touch up I might need for x,y,z reasons. I also tell all of my tenants when they first move in that I expect them find a few issues with the property. I've never lived there, I don't know what the last tenant chose not to tell me. I once had a prior tenant kick a dishwasher door such that it wouldn't close and run. After calling the appliance repair man who said it would be costly, we just ordered a new one. Keeping the turn around time tight allows you to deduct these items from the security deposit. In California, I have 21 days to return a security deposit to my tenants. Keeping this turn around time short, I'm ablate better manage my costs and forward them onto the tenant.
I know that this didn't particularly answer the tax side of things, but hopefully it helps some.
The cost to get “rent ready” only gets added to your basis when/if you buy a vacant property....not between tenants.
Yes @Kristina Heimstaedt For the tax part, I was thinking of bigger update. month or two.
However you bring up the time-line of the security deposit return is great. I can see how acting within this window can keep the 'in service' flag waving on short turnarounds. The market here is a week or two depending on time of year I am finding. But a day to fill is not uncommon.
@Wayne Brooks Thanks. "rent ready" is the term I kind of missed. It would still be rent ready,(last tenant was renting it!) I just want to face lift the hypothetical unit.
Is there a cut off? just asked this in a thread about an over/under $2500 rule. still going to look that one up.
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