All Forum Posts by: Luke Liu

Yes, thanks for all the replies. I will definitely talk it over with my parents. Given the depreciation deduction I may just end up renting it - correct me if I'm wrong but it's a decent mid-luxury condo and I have a doorman and super, so hopefully the smaller repairs can be handled directly by the super so I won't have to deal with tenant issues all the time...

I really lucked out in that we bought a condo rather than a co-op since now I'm realizing how much more headache a co-op is to rent out. Thankfully our condo is relatively straightforward process to rent out units.

And @Jean Bolger (no idea how to make those linky things), I noticed the profile pic and that irish fiddle stuff if sweet! I listened to a couple of things on the site. I grew up playing violin and while I still prefer the mendelssohn and tchaikovsky violin concertos above everything else, I may start dabbling into new genres I ever get some free time... (assuming I don't spend it all learning how to become a landlord yikes)

And in the above calculation, I would just skip paying the monthly $1k rent to my parents as I do now, as they would allow me to defer it until I graduate bschool!

Thank you guys for responding. If I lived in Chicago now, I would not be thinking of buying an investment property in NYC. I didn't expect to leave NYC when I bought this condo for a while but plans change.

Thanks very much for bringing up the depreciation aspect - that's how clueless I am on the subject (any beginner guides to read up on this?). I read a bit on this subject and this is my understanding - could you please opine if this is incorrect.

I don't actually have an official mortgage to my parents (i just pay them a nominal $1k fee monthly) and it's essentially an interest free loan. I don't take any mortgage/tax deductions and I'm not sure how they treat taxes on their end, but I essentially just treat the $1k as rent.

My condo is worth about ~$600k. Land is ~20% which means the building is worth $480k. Depreciating that over 27.5 years means the annual depreciation is $17.5k and the monthly amount is $1,450.

From a cash flow perspective, is the following correct?

Monthly rental income: $2,800

less taxes ($400) <- understand I can claim some of this back at year-end

less condo fees ($630)

less depreciation (1,450)

Total taxable gain = 320

Does that mean I will pay normal income tax on this $320 per month? Are there any other hidden fees I should deduct (something like landlord's insurance?) If you guys have any primers please let me know, but thank you for the advice!

I realize this may be a fairly unique situation but I'm wondering whether anyone can opine on this or point me to the right resources.

With the help of my parents I bought a condo in NYC several years ago. I've been living in it myself for the last 3 years, paying the condo fee/real estate taxes, and paying my parents every month to repay my unofficial mortgage (i.e. their unofficial loan to me; we bought it with cash).

I'm now going to go to business school for two years in Chicago so I'm wondering what to do with this property. My options are:

1) sell the property (and get maybe a ~8% return over three years); I understand capital gains are not subject to taxes if it's under $200k

2) become an NYC landlord and rent out the place while I'm in school. I may return to NYC afterwards and live there.

So my question is, how much of a hassle is #2 going to be? If I'm in grad school, with no income and a temporary residence, am I going to pay "income tax" by becoming a landlord in NYC? After paying real estate taxes, the condo fee, there's not much left over from rent, and if i have to pay income taxes on rental income then that may be close to zero/negative cash flow. If there's some possible deduction I can take for being a poor student that would help.

Anyone care to opine? Thanks!