All Forum Posts by: Craig Lessler

I have a long term rental (SFR) which I converted to an Airbnb in October 2019. My property manager is acting as the host and we have already had multiple bookings.

Questions:

1. Is the Airbnb considered "Active" so that it is reported on Schedule C instead of on Schedule E as a passive activity?

2. Provided I am to report the Airbnb activity on Schedule C, can I use the net loss (from painting, decorating, repairs, purchase of washer, dryer, furniture, bedding, linens, towels, etc) for 2019 on this activity against other active income such as W-2 income?

Thank you for input.

@Deforrest Ferguson, you may want to consider taking a loan against your 401K plan or other retirement plan if you have one.  You can typically borrow up to 50% of the balance in a 401K with a maximum loan amount of $50,000.  The interest rate would be reasonable.

I suggest you go to the Pittsburgh REIA. The website is PittsburghREIA.com. The website has a membership form. I would strongly recommend attending one of their meetings. Josh Caldwell runs the Pittsburgh REIA. Josh Caldwell is active on Bigger Pockets. I also suggest you connect with him. He can be a great resource and he connected me to a local lender in Pittsburgh.

Does anyone have a recommendation for a property tax appeal  representative in the Phoenix area?

I have several condominiums which have been re-assessed and I would like an opinion as to whether it is worth filing property tax appeals.

I have rehabbed several properties in Phoenix with new kitchens.  You can message me and I can give you my contractor contact.

You should go to the website Rently.Com

You may want to ask your property manager to put a Rently Box on each house so that prospective tenants can look at the homes on their own without your property manager having to make a trip for each showing.  With a Rently, the prospective tenants give their credit card as security and in effect pre-screen themselves.  This way, the houses can be seen instantly by prospective tenants.

Isabella,

CAP rates are too low in Phoenix and a lot of the smart money is being invested out of state.

I purchased 22 condo units in Phoenix and Peoria in Nov 2015 and April 2017.  I have seen the Phoenix Units more than double in value and my Peoria units are worth 40 percent more than I paid.

I have sold 9 of my Phoenix Units and moved my money to Pittsburgh where I can find CAP rates of 8 percent and where properties have not sky rocketed in price.

I have purchased 14 properties (19 units) in Pittsburgh over the past year and my CAP rates and cash flow are much better.

I strongly feel it is the wrong time to be buying properties for cash flow in the Phoenix valley.  Although the Phoenix market may not be over priced, much better cash flow can be found in the Midwest.

Also, if there is a correction in home prices, Phoenix may potentially get hit harder than other areas which have not had such rapid appreciation.

Before you invest in Wilkinsburg, I suggest you speak to some property managers first.  My property manager refuses to manage any properties in Wilkinsburg.  I assume that there is a very good reason why.

Tax Question about deductibility of an annuity surrender charge in 2017.

If an annuity is cashed in to buy rental real estate and there is a large surrender charge, can that surrender charge be deducted on:

(1) Schedule A as a misc itemized deduction for 2017, or

(2) Schedule E as an expense to acquire financing to buy rental properties?