All Forum Posts by: Jennifer Kessler

Hi there,

I purchased a primary home in 2022 with the hopes of converting a portion of it into a STR. The conversion unfortunately is not completed yet and therefore did not operate as a SRT in 2022. I'm curious if there is still a way to capture tax advantages in the future, such as bonus depreciation, since the STR was not created within the first year of buying the property. Hopefully my question makes sense. I'm open to other suggestions as well.

Thanks,

Jennifer

Thanks, I have not considered a cost segregation study (and am just familiarizing myself with it). However it doesn't sound like it will benefit our situation. This property is our new primary residence and needs a lot of renovations. The proposed ADU would be retrofitting an existing attached bonus room. We plan on holding the property long term. Cash flow (and tax savings) is the goal with this ADU.

Thank you for the responses everyone. One more clarifying question: 

I have read that technically California does not allow ADUs to be used as STRs (must be rented >30 days at a time). Despite this, I know people are using their ADUs as STRs just by searching AirBNB. Do you have any insight into if the tax benefits/deductions are void in California based on the 30 day restriction? 

Looking for info on any potential tax benefits of STRs. What can be deducted? Is it more beneficial to have it structured under an LLC?
Are there benefits if an ADU is used as a STR (I am in California)? I am aware property taxes will go up when an ADU is built.

@Chris Levarek

"Use a team, get many reviews. Leverage other's experience. Don't assume anything." Great advice! Thanks for breaking down your pros and cons. 

Happy weekend! Curious who is doing out of state BRRRRs. I live in San Diego and don't quite have the capital to do a BRRRR in this market. Obviously finding trustworthy contractors is key which is the part that makes me nervous. From those of you who have done this, I would love to hear about your experience and any tips you've learned along the way.

@Jim Spatzenfeld Thank you for that tax reminder! That is very important in thinking through my plan. 

Hello, I am needing some guidance on the best strategy for us. We live in San Diego and will be coming up on the 2 year mark of purchasing our primary residence this February. Purchase price was 630k, currently worth about 800k, loan is 560k. We have about 75k in a savings account to use towards an investment. We would like to move out of our home at some point within the next 2 years. Do I: 

1. Sell our house come February, buy another primary residence that has room for rental income (i.e. space for ADU, downstairs with separate entrance).

2. Keep our house. Purchase long term rental property out of state for around 200k or less. Then figure out another primary residence in a couple years. 
3. Keep our house but rent it out. (Would break even or be in the red until our loan is payed down a bit). Purchase a primary residence in same area. Finance options: home equity loan vs conventional??

Happy to provide more details if needed. 

Thank you!

Jennifer

I'm in San Marcos and just starting out as well. I'd be interested in meeting up!