All Forum Posts by: Heather Schmidtknecht

@Palak Shah, if I am financing this purchase, isn’t the money I have to pay to do the deal the same with either option?

@Nathan G. I wish you were my son! 😉

I am ready to make an offer on a house being listed for $129,500. I am looking at two different options to structure my offer (see below)... Is there a tax (or other) advantage to either offer?

Option A:

Offer $125,000 and ask seller to pay closing costs estimated at $3,500.

Option B:

Offer $121,500 and pay my own closing costs estimated at $3,500.

@Adam Scheetz, the mortgage on my property with escrow for taxes and insurance is $749/month on a 15-year. The rent is $1000/month for a 3 (small) bedroom & 2 bath home; tenant pays all utilities. Currently I’m paying ahead on the mortgage, so I pay $900/month automatically and then I save the other $100/month for whatever might be needed in the future. Many would have turned down this deal, but because my property is nice and most of the rentals in this area are not (college town), I felt it was a good investment. Since I have a full-time W-2 job that I LOVE and don’t need the month-to-month cash flow, I am looking at this at a long-term investment to produce retirement income and diversify my investment portfolio.

@Adam Scheetz, I am an investor that is looking at long-term gains and I have purchased a nice property below the 1% rule. However, I could easily pay the mortgage/expenses should my property become vacant... if I couldn’t do that, I may not have done that deal.

@Andrew Smith thanks for the clarification... I was wondering if the tax credit would apply to a rental and it certainly changes the numbers to know that it will not.

@David Katz I would agree. I have a six-figure full-time job that I LOVE — and — I am a real estate investor... and because I am not *dependent* on the rent to make my payments every month, I have the luxury of waiting for quality renters instead of hurrying to get someone in there so the rent keeps coming.

I’m intrigued by solar panels and if this is an opportunity to add value to my property as well as increase monthly income. However, I really don’t know anything about them and am relatively new to being a landlord, so I’m seeking your thoughts!

Here are the numbers I have so far:

Solar panel & installation quote: $18k

Average electric bill $100/month (which tenant pays)

Supposedly, there are incentives from electric company as well as potential tax deductions... am waiting to see these things in writing.

I was thinking if the cost of electricity is $100/month and that would go away, I could raise my rent since the tenant would not have to pay electricity. Plus, I’m thinking it would add value for resale someday? Not sure?!?

@Trevor Cox I am an investor near a university... I was unsure if the pros/cons as well, but after looking at several properties in the market, I found a sweet spot. In this community, the student supply matches/slIghtly exceeds the rental availability... so many of the existing property owners do not maintain their properties well and many do not rent to families (because they can make more charging students by the bedroom). So... I looked for (and found) a NICE single family home and had several families inquire within the first week of owning it. It rents for $50/month less than I could’ve gotten from if 3 students rented it, but hopefully I won’t have to turn it over every.single.year!

@Trevor Gaal (and all others) — thanks for all of the meaningful advice. Since my original post, I have become aware of the fact that one of the tenants was evicted for a meth bust — so there is some official mitigation in order and I’m taking this as a sign to look elsewhere... it’s probably bigger than I’m ready for anyway!