All Forum Posts by: Johann Jells

You're welcome. One of the most interesting pieces of advice I ever got was to inventory everything in a property purchase that might be depreciated faster than 27.5, like appliances, carpets etc.  You just need to come up with a defensible methodology for the valuation you assign.

OK, this is an important tax feature of owning investment property. Every bit of what you bought is "capitalized", considered an investment, and each piece from the house to the appliances are on a depreciation schedule. Ex: A house, and major structural improvements are 27.5 years. You can't "expense" on taxes these purchases the year you buy them, they must be deducted over the amortization period. But the upside of this is that if you put a sum of money into capital improvements, then that's added to the capitalization, what you paid for the property. And that number is what's used to calculate capital gains when you sell.

There's a whole IRS can of worms dealing with what is a capital improvement and what is an expensable repair. It doesn't always make sense, but it is what it is. A roof is a capital improvement, a paint job is not, unless it's part of a major project, then it is.

So to capitalize an improvement you need a financial record of expenditure. A record of your labor does not qualify, no matter how much sweat you put into the property. 

You can't capitalize and amortize your sweat either!  All the IRS knows upon sale is that it's value went up and you have no receipts to show for cash value added to account for it, like you would if you paid a roofer and added the cost to your capitalization. Same thing goes for contractors on work that is expensed instead of capitalized and amortized.  Most of us would prefer to write off expenses that year, but it is not without a price down the road.

One thing a lot of DIY don't realize is that if you're flipping you'll be paying capital gains tax on your sweat equity, something you would not be doing if you paid for the labor.

I don't track my labor, I don't want to know! But that's just me.

Well that's why you have mice, you're killing the predators! Leave the poor snakes alone!  Same with geckos, spiders and house centipedes. If you have them, it means there's something else in the house they're hunting. If the snake is actually a rattler, call animal control.

It's funny, there's guys here that do "free install", so that they're not so liable if its bad job.  I've done a number of granite tile counters, but to be honest the slabs have gotten so cheap I don't know if I'll do another. It may pay for a tiny kitchen where they will still charge a lot of labor even when the sq footage is low. I found that years ago trying to get a marble slab for my 5' wide vanity I couldn't get it below like $800.  Another potential upside of tiles in a B level place is being able to swap out a tile if they damage it, but my oldest is from 2005, and it's still perfect.  But no laminate, not ever! Especially the cheap crap on particle board from the big boxes.

Well, a first step would be learning to be thorough and detail oriented.  A good place to start is to actually read the description at the top of the forum and make sure you're asking questions in the right place.

@Fabiola Lough The "buy it once" model is basically dead. Even old Quicken makes you keep upgrading every year or 2. I've been using it for 30 years, so I keep using it, it's fine for my needs managing a dozen units. Really just 2 active accounts, a checking and a CC.  What annoyed me about the cloud systems was that I could not import my back data. I refer to that old stuff frequently, like "what plumber did I used for unit 2's toilet in 2005?"

If he's not paying, he'll be out. Period. NJ may be tenant friendly but non-payment doesn't work. I've never even seen a judge, you go to an arbitrator first, and if they don't have the money then and there it's done. Leases MUST be renewed in NJ with a few exceptions, so you could not just decline to renew.  Read the state pamphlet: 
https://www.state.nj.us/dca/divisions/codes/publications/pdf_lti/t_i_r.pdf  

One bank account, one credit card, and use Quicken to track transactions and generate reports for filing taxes. Even banks that don't synch with Quicken allow you to download transactions in a file to import them. Never pay cash for anything. Get a Home Depot Pro account,(I don't mean a card) and they will email you a PDF receipt of every transaction, so you don't even have to keep the paper ones. Other vendors just photograph the receipts with your phone. You don't want shoeboxes of receipts! Been there many years ago, awful idea.

My latest revelation is using Google Keep for notes and lists. Synchs between your phone and PC.