All Forum Posts by: Basit Siddiqi

There are exceptions where you can potentially still get capital gain exclusion if you sell the property before living and owning the property for 2 years.

Have a conversation with an accountant to see if you quality for the exception.

You can take bonus depreciation on any property that has assets that qualify.

So to answer your question, yes, you can take bonus depreciation on components of a house that is used as a MTR.

However, what you may want to determine from a conversation with an accountant is whether the activity will be treated as active or passive.

The next question would be, even if you can do a cost segregation study, would the added depreciation from bonus depreciation be beneficial.

The great thing about living in a High Cost of Living area is that you(hopefully) make a great salary.

The high salary that you make can go a long way in other markets where you might be able to put a down payment on an investment property at a much faster rate.

The other great thing about living in a high cost of living area is that you might have friends / colleagues who are high net worth individuals. You have easier access to capital from these friends / colleagues if you decide to partner in the future.

Best of luck!

Have a conversation with the accountant on cost segregation firm recommendations. Furthermore, have a conversation to see what is required to treat a property as active instead of passive.

Best of luck to you!

Who cares how much the prior owner collected from airbnb / vrbo in the past 2 years.

STR's are performing much differenctly now than they were 2 years ago.

I would run your own profit and loss using rental comps(Airdna) and expenses that you will be charged.

It is not like if things are grossly different when you purchase the property that you can go to the seller and ask him why your numbers are so much far off than his.

Best of luck!

If you think appreciation will continue to be 8%, it sounds like a sound investment.

looks like you are -1% annually on a cash flow basis
8% annual appreciation
Net 7% return

Furthermore, it sounds like the appreciation is on the $485,000 and now the $15,000 cash invested.

Best of luck!

It sounds like it would be a great candidate for a 1031 exchange.

The requirement is not that you had rented it out but you held it for investment purposes.

Have a conversation with an accountant to determine what your gain / tax will be upon sale. If the tax is more than you are wanting to pay, consider doing a 1031 exchange.

Best of luck!

I don't know what 2% tax benefits or 2% amortization is. Do you care explaining what they are?

I do like the first two parts of the equation - Cash on Cash return + 3% appreciation

Easier financing does make things more expensive.

So while the financing is easier in UK, I would have to guess, on average, houses are more expensive, in the UK.

Sometimes, it is better to do things that are harder / less competition.

I am hearing less and less people mentioning about moving to the UK.
London and a lot of cities are gloomy with few months of sunshine.

People want to move where there is sun and people can live a comfortable life.

I would invest in Spain before the UK, even if financing is more difficult.

I think it makes sense in one of the following situations

1) You want to establish residency. Some countries allow residency / golden passport if you buy a certain amount of real estate in the foreign country.

2) Money / Taxes are of no concern to you and you just want a property to call home.

In most other situations, you are likely better off renting in the area.

Some things to consider
1) Spending more than 183 in a foreign country normally will make you a tax resident of that country
2) If you die, you may need to follow the estate laws of that country
3) In the US, if you live in the property for more than 14 days, it may be deemed a personal property limiting your tax breaks as a rental property.