All Forum Posts by: Bill B.

New landlords always try to start off nice and then turn up the mean. The opposite is more effective. Start very strict and then you have some leeway in case of a family emergency or some such thing months/years down the road. 

@Dale Walker

Hey Dale,

Don’t use a bank or a broker. Use someone that is a QI for a living. They don’t have to be local either. It’s relatively inexpensive, I think 1 to 1 is less than $1,000.  I’m sure 3 to 1 is more, but doubt it’s more than $2,000. 

If you’re looking for a recommendation, hit up @Dave Foster long standing member who always answers questions, based out fo Florida I believe. 

@Philip Sriployrung

What a billionaire does isn’t what a millionaire does, isn’t what the middle class does. 

What you should do with a $50k property or a $500k property or a $5million property aren’t the same. 

I bet if you ask the people on those podcasts if they’d bother on a $50k property you’d get a resounding no  

If you were able to claim every single penny of depreciation day 1 you’d put $4800 - $500 in your pocket year 1 instead of $150/year for 27 years. If it’s 5 years instead of 27 you get $800 for 5 years instead of $150 for 5 years and then nothing instead of $150 for 22 years. 

So unless $700/year is holding you back from your next investment you’re forcing yourself to 1031 quickly to avoid running out of depreciation. 

That said, it’s your money, what works for you or is important to you is different than me or almost anyone else on BP. I was simply stating that the returns on the effort are minuscule at that price property. If it’s not work to you but something you enjoy that’s another story. But dont do it for the returns. 

Why are you trying to accelerate depreciation if you’re only in the 12% tax bracket? Are you planning to stay in the 12% bracket for the foreseeable future? If not you’d be better off taking the depreciation in the future. 

If the house was under $50k and you assume 20% for land, you’re talking about depreciating $40k?

If you paid $500 to accelerate saving 12% on $40k ($4800), you just paid a 10% “tax” to take depreciation earlier. If you’re going to buy and hold for 10+ years this was wasted money, if you’re going to sell in 5+ years you’re now stuck in a 1031 trap. You have to exchange until you die, or pay 25% recapture tax   Effectively doubling your tax rate, plus the 10% “tax” you paid to do this  you went from 12% to 35%  

If it’s not worth it’s for people buying $200k houses in the 18% tax bracket I don’t see how it can be worth it for less than 1/4th the benefit they would get. 

It’s probably too late to not do any of this, but just saying save your money next time.

@Pete Harper

Yes, to avoid any taxes you’ll need to reinvest your net proceeds ($350k minus commissions and costs.)

You can do a partial exchange but anything under $350k purchase will involve some taxes. 

They are all separate from your personal exemptions.  They can always be taken against your rental income even if you don’t itemize  

Depreciation isn’t a thing that you can do, it’s a thing you must do, or the IRS will just pretend you did anyway. And it’s only on the value of the building, not the purchase price. 

Las Vegas is still a great place to own. Lead the nation again with another 9% in appreciation. If you can’t make money here you can’t make money anywhere. 9% may not sound like much but if you put down 20% you made 45% on your money in the last 12 months. if you bought 7-8  years ago the property is probably worth about double your purchase price, so you’ve made 500%, not too shabby  

Buy and hold and hold and hold. I’m trying to buy another lake home in MN for $475k that the original owners bought 40 years ago for $28k. 4 doubles in 40 years, that’s only 7% yearly appreciation. 

That’s why you’re going to say I’m sorry I can’t rent to you. 

Checks don’t “expire” mine are 5 years old, my mom’s are probably 20 years old. 

No cash, not ever.

Whether it’s a setup for a I paid no you didn’t scam, or simply a friend robs you after the rent is paid, you don’t need the hassle. 

If the application said all payments will be made this certain way, applicant read and agreed to it, that’s how rents paid. 

I assume they have a credit card for cozy, or they can go to their bank and get “new” checks or they can live somewhere else. They’re supposed to be on their best behavior now, it won’t be better later. 

20 years, 13 properties, zero issues...

I don’t use anything special with landlord/master keys versus tenant key. 

You don’t need to buy “kwikset keys” and household key will work, you could use your house key to open rentals. Every time you buy a new lock you get another set of keys. Label them with a number each time you get them and every time you change tenants go to the next key in the sequence. 

For that matter all your rentals could use the same key if they are SFR, your tenant won't be going to another random home you own to try their keys.

You simply insert the working key, quarter turn the lock, remove key (using the included tool), insert new key you want to use, 3/4 turn back the other way and you’re done.