Primary Residence: Portion Used as Rental Questions
If I want to continue to live in my primary residence AND now rent out a portion of it to a renter, am I able to do so? Would I have to inform the lender? Can I then treat my property as an investment/income property? Thank you!
Most Popular Reply
Is it a single family house and just renting a bedroom? Why do you want to have your property treated as an investment property? Your primary residence you get to deduct the interest and taxes but not the insurance. If it is an investment property, you can deduct taxes, insurance and expenses for maintenance, etc. However, when you rent out a portion of your home, you need to make sure you're properly dividing any expenses you pay to maintain the home between personal and rental uses. So not sure saving that much in taxes when all said and done. The IRS imposes a 20% penalty for inaccuracy when a taxpayer significantly overstates expenses.