What Happened To The BARRRR Method? Remember this article...
2 Replies
Michael Pilolla
from San Luis Obispo, CA
posted about 1 year ago
A while back, a blog post was published here on BP by @Brandon Hall called: Forget BRRRR: Meet the (Superior) BARRRR Strategy
But it's no longer available. I don't remember what the 'A' stands for. The gist was this: Posting a rental property for rent BEFORE doing the rehab work impacted the way the rehab costs were treated at tax time. Something about being able to write off up to $2500 at once instead of amortizing it over a number of years.
Does this ring a bell for anyone? Any CPA's out there that specialize in real estate investing that could shed some light on this? I just closed on my first property and I'm about to start rehab work but want to post it for rent (eg - Coming January 1st, 2020, Nice home for family etc etc....) So any clarification would be greatly appreciated.
Thank you very much in advance!!!
Basit Siddiqi
Accountant from New York, NY
replied about 1 year ago
@Michael Pilolla
I think the "A" in BARRRR represented "advertise".
The idea behind the article was that if you advertised your property for rent that you can start expensing items and depreciating the property.
However, the property has to be in service before you can start to depreciate/expense items related to the property.
Advertising a property does not put a property into service.
I think the article is taken down because it is not applicable.
Michael Pilolla
from San Luis Obispo, CA
replied about 1 year ago
Thank you so much for clarifying. Honestly, I was a bit confused about how it worked. I didn't understand why advertising a property early would make a difference. Thanks for your insight and response. It's very much appreciated!
Best,