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All Forum Posts by: Tim Schroeder

Tim Schroeder has started 15 posts and replied 312 times.

Post: Netflix and STR question

Tim SchroederPosted
  • Rental Property Investor
  • Castle Rock, CO
  • Posts 333
  • Votes 387

I just added one Roku to each of my STR's as a trial. If it goes well I will convert all TV's and dump cable and save $2500/year in cable bills! I provided Netflix (a separate account from my family account), Hulu Plus (super cheap) and Amazon Prime (PIN required).

My only issue is that people log out and then back into their own account then log out when they leave. So I plan to provide my account info so they can log back in. But, I am concerned that there is nothing to stop them from using those credentials at home, on their own Roku or phone or smart TV!  And Netflix only allows 4 simultaneous sessions per account. So I may have to change the password monthly or something.

Post: STR in Smoky Mountains amenities

Tim SchroederPosted
  • Rental Property Investor
  • Castle Rock, CO
  • Posts 333
  • Votes 387

Home theater vs. pool table is a toss-up, IMHO.

Post: Rentals Taxed on Net Income Which Doesn't Include Mortgage?

Tim SchroederPosted
  • Rental Property Investor
  • Castle Rock, CO
  • Posts 333
  • Votes 387
Originally posted by @Matt Ward:

This thread is nuts

And that comment makes it better?

Post: Rentals Taxed on Net Income Which Doesn't Include Mortgage?

Tim SchroederPosted
  • Rental Property Investor
  • Castle Rock, CO
  • Posts 333
  • Votes 387
Originally posted by @Steve Mason:

So if I'm understanding @Tim Schroeder right (this will also be my first year filing taxes including a rental), all those expenses are deductible except the actual Principal payment? Like Taxes INsurance, Interest? Then miles, advertising, repairs...what about interest on a Line of credit you took out to put a big down payment on the purchase? Thanks. 

All interest is deductible. Everything you spend related to the property is deductible. If it's a big item like a roof, then it's a capital expenditure and it's handled differently and the deduction is taken over the course of a number of years (your accountant should explain that)

Post: Rentals Taxed on Net Income Which Doesn't Include Mortgage?

Tim SchroederPosted
  • Rental Property Investor
  • Castle Rock, CO
  • Posts 333
  • Votes 387
Originally posted by @Paul Flynn:

Would it be so crazy to just keep your mouth shut and not submit anything to uncle sam. Imagine you used a HELOC to purchase a house but just said you used it for renovations and cash the tenants checks and not deposit anything into a bank account

Yeah, sure. Buying a house doesn't generate a paper trail. And banks don't keep track of checks.

People sometimes go to prison for tax evasion. I recommend some soap-on-a-rope.

Post: Rentals Taxed on Net Income Which Doesn't Include Mortgage?

Tim SchroederPosted
  • Rental Property Investor
  • Castle Rock, CO
  • Posts 333
  • Votes 387
Originally posted by @Chase Cline:

@Anthony Wick yea I think I'm just overreacting. We did get some nice principal pay down so I guess it does cancel the tax out. Just hate paying Uncle Sam!

Don't you like roads, national defense, medicare, education, and social security?  :-)  

Jokes aside, tax is just another expense that comes out of profit. So make sure your profit is high enough to cover it, or look for an investment that is.

Post: Rentals Taxed on Net Income Which Doesn't Include Mortgage?

Tim SchroederPosted
  • Rental Property Investor
  • Castle Rock, CO
  • Posts 333
  • Votes 387
Originally posted by @Chase Cline:

@Tim Schroeder well looking at it pre-tax is missing a huge portion of the full picture. What's the point in looking at a pre-tax $10k profit when you're gonna owe $10k in taxes. You didn't actually make any money so why have that investment? I want to know cash in my pocket after taxes

If your pre-tax profit is 10k, then you'll pay (for example), 2k in taxes so you made a profit of 8k. There is never a case in which you made a 10k profit and paid 10k in taxes. I think what you're doing is including your mortgage payments when calculating your "profit" which is incorrect. Calculate your profit excluding the principal payments. In your case you may find that number is negative.

If that's the case, sell it now while it's a seller's market and either look for something better-performing, or hold your cash until there is a market downturn.

Post: Rentals Taxed on Net Income Which Doesn't Include Mortgage?

Tim SchroederPosted
  • Rental Property Investor
  • Castle Rock, CO
  • Posts 333
  • Votes 387
Originally posted by @Larry Turowski:
Originally posted by @Chase Cline:

Moral of the story?  Don’t aggressively pay down your mortgage. 

 PLUS, you could use that extra money to fund another property :)

Post: Rentals Taxed on Net Income Which Doesn't Include Mortgage?

Tim SchroederPosted
  • Rental Property Investor
  • Castle Rock, CO
  • Posts 333
  • Votes 387
Originally posted by @Chase Cline:

@Todd Rasmussen great catch on the depreciation though... I have a feeling she forgot to include the updated depreciation in our expenses! That will basically eliminate all the net income... gonna call her now. thanks!

 Your CPA "forgot" to include depreciation???!?!?!?!?

Post: Rentals Taxed on Net Income Which Doesn't Include Mortgage?

Tim SchroederPosted
  • Rental Property Investor
  • Castle Rock, CO
  • Posts 333
  • Votes 387

@Chase Cline Let's say I buy a place for $200k and it generates $50k in revenue. Let's assume $20k profit and $20k mortgage payments. I am going to be paying taxes on $40k which will be at least $8k. So with the $20k profit minus $8k in taxes, I'm really only getting $12k cash in my pocket after the tax year. That's only a 6% return on the purchase price.

You're looking at this wrong. ROI analysis is pre-tax. Just like when you look at mutual fund returns, it's pre-tax. When you get a job, your salary is pre-tax. When you win the lottery, it's pre-tax. In your example above, the ROI is 10% (20k/200k) on which you will pay some amount of tax. Just like you pay on mutual funds, salary, or lottery winnings.