All Forum Posts by: Kate C.

Hello- I have been reading for years about the benefit of being able to deduct $25K in losses from rental properties (and more if you are a real estate professional). The mystery to me- is how do average people get to this loss?  I am including depreciation, taxes, insurance, repairs, and all the typical travel expenses, but still either breaking even or showing a taxable profit.   This may be too individual-based and complex for a forum post, but I am curious what expenses or insights others who have successfully used this tax write-off can share. Thanks!

Hello, Thank you in advance for your time. We would like to move to a new town and make an offer on a home. We have almost paid off the 15-year mortgage on our current home. Is there any general "rule of thumb" for holding on to single-family residence and renting (if you can afford to).  I am considering if we should do a cash-out refinance and get a new 30 year loan, then use that money for the downpayment on the new home. 

Would the cash out money be taxed? Is it preferable to complete these transactions in phases or all at once. First, cash out on primary THEN make offer and get a new loan for new primary or complete cashout and apply for a new loan at same time. 

I can share specific figures if anyone is willing to offer their analytical brain and time in a private message. 

Thank you!

Thank you Leo.  This is exactly the kind of insight I was hoping for when I posted. 

Hello- We own a house that we have rented successfully in DC for 15 years. We did a cash-out refinance several years ago, but still have equity- value is 900K and we owe 280K (30 years loan) 20 years to go to pay off. We are considering buying a duplex (1M) as a rental closer to our home near a beach with the idea of renting one unit long term tenants to the other as a short term vacation rental. The house is DC has an amazing location and I just have a strong feeling it is the kind of property you hold on to. (Near two college campuses, backs a forest, strong schools, safe, close to downtown etc). As we consider the options for financing a new investment duplex - does anyone have any experience or advice with this scenario?  I would be interested to hear if anyone else held on to a single-family home and refinanced to buy a multiunit or if the most common recommendation is to sell and do a 1031 exchange. I know it is hard with so few details- but any comments are welcome. Thanks!

Hello-  I am an experienced landlord with a rental house in DC and now am considering purchasing a second single-family or multi-family in LA area.  I would like to discuss some scenarios with an experienced, professional advisor who understands the tax implications, laws, market, implications of cashing out money from a retirement to use for a down payment, how much $ we can afford to invest etc.  I would like a professional service available at an hourly rate (I have an agent I trust and like, but need more big picture financial advice- not linked to any product).  I apologize if this is a naive question- who offers this service?  Does this exist? Can anyone recommend someone in CA or Los Angeles? Any advice is welcome. Thank you!

Hello, I am about to move forward with a cash-out refinance and would welcome advice.   If anyone has time and interest in this scenario- please weigh in.  My father has had a 4 unit rental property in a  location near a college campus for 20 years. Itis all paid off. He is very dedicated to his nonprofit and has been vesting the property over the last 8 years, wanting his nonprofit (addressing global health issues) to have long term funding and his legacy to live and getting a tax write off. He also generously vested to his tow children. Currently, my sibling and I own 40% of the building and his nonprofit owns 60%.  I am grateful.  I also don't know how long term capital decisions will be made when the majority is owned essentially by a board of directors, once my dad passes away. It is managed by a company. He is in his mid-80s. I am considering taking out a cash refinance on a rental home we own (our first home). The current loan balance is 340K at a 4.5% 30 year. 22 years left on the loan. With a new loan of 510K and a new 30 year rate of 4%- I can get 150K cash and buy back a portion of the more valuable building from my father's nonprofit. It would be at fair market value and done legally and transparently. My sibling would also put forward 100K and buy back a portion. I estimate that we could buy bout 10% back. The rationale is that we would then be majority owners and that in the long run, it will be a good investment.  If I have not completely confused you and you made it to the end of this post- please share your reactions. I know there are many details missing, but to start does the cash out on the rental sound reasonable?  I know cash out on rentals are much harder. We have a lender and equity in the home (valued around 800K). Thank you! 

Thank you Jason.It seems like a rule of thumb is to refinance if the rate drops to 3/4 point. I may keep looking for lower rates. anyone has done a recent cash out refinance on a rental- I would be curious to hear the rates and fees. Thanks for your time!

Any insight into cash-out refinance rates on rental properties? Are there any Covid-19 related impacts of rates for new loans under 519K?  I am considering taking out 150K cash to reinvest in a home worth 800K- current balance is 342K- 8 years into the 30 year loan. The current 30-year rate is 4.5%, new rates will be in the 3.8-4% range for a new 30 year loan.I will do more research and talk to professionals, but general advice is welcome.  Thanks!

Hello- My daughter is entering her second year of college and looking for off campus housing in DC. Studios close to campus rent for 1,600/month. There are condos for sale for 220,000 with 400 HOA fees. I am considering the option of purchasing instead of renting and keeping the condo as an investment after she graduates. With 20% down total monthly expenses (taxes, insurance HOA, P$I) payments would be approx. $1,500/month.

I have two questions for the community- 

1-Do you have any general advice related to purchasing a condo versus rental related to making smart financial decisions?

2- For the downpayment (40,000)- I have 15,000 cash and for the rest a) I can get a HELOC on our existing home, b) cash out mutual funds or c) take an early withdraw from retirement savings and payback up to 30,000 with out penalty. Which is best?

Hello- My tenant signed a one year lease (after completing a two year lease) in July.  They just called two days ago (October 10th) to tell me they are breaking the lease and will move out and stop paying rent November 1st.  They bought a new house and I wish had told me earlier, now I am scrambling to find tenants and will need to rent below fair market value to fill this vacancy.  Winter is the hardest time to rent.  I may find someone to move in Nov 1st for two months at $400 below the rental rate and may be able to find another 6 month lease on January 1st.  I know I can withhold the loss in rent.  Can I withhold my expenses for having to travel there to show the property? (airfare and hotel?)  I live in CA and the house is in DC.  Thank you very much for your time and advice.