All Forum Posts by: Mark McGarry

I had a similar problem in my 2 story rental unit, but just to one bedroom.  Are the vents in the floor?  

I used a fan that you put into the floor vent that replaces the standard grate.  I can't put an Amazon link on here but I got something from Amazon  that is called "SunCourt Flush Fit Register Air Booster".  $45 bucks a piece, might be worth a shot before you do anything drastic.  This accomplishes essentially the same thing as inline fan Jim was talking about above, but it's not as discreet. Plus depending on how many rooms you need to do this for, you might need more than 1.

Another thing to suggest is that the tenant closes some vents on the lower floor (if it doesn't make that floor too hot).  That generally increases air flow to the other vents (so hopefully more upstairs). 

I thought I would give you guys another update about the depreciation thing:  my accountant has essentially advised that we should not depreciate 100% of the purchase based on the the following logic:

"As long as you pay the nominal ground rent, the ground rent owner can't sell the land, so I think that land still has value and there should be some sort of allocation to it. The other thought I have is that you will be unlikely to get current deductions in the future on rental losses. When you go to sell the property in the future, any depreciation take over the years reduces the cost basis and will also have to be recaptured as ordinary income, when you are likely to be at a higher ordinary tax rate. By leaving an allocation to land, you would shift some of the income to capital gains when you sell, which are currently paid at a lower rate (max 20%)."

What do you guys think?  @Account Closed - do you have any supporting documentation or anything about 100% depreciation I can show the accountant to change his mind?

Certainly seems to be some more money grabbing.  I actually came across this yesterday trying to register a new property per the old requirement and the site for registrations now directs you through a part that asks for inspection info and an upload of an inspection document.  So the technical pieces of this are already in place.  Seems like the $30 a year is still the same but I guess now you have the added inspection cost plus any remediations they decide on.

What does everyone make of this new Baltimore City Rental licensing requirement?  (New as of 1 AUG 2018- not the same as the property registration from before)

http://dhcd.baltimorehousing.org/property_registra...

Does anyone have any info of what kind of things this is going to be looking at?   

Perhaps as people start getting these inspections we can share some inspectors who aren't being total hard-asses?

Welcome Eric, I'm also originally from NJ. 

I own 2 houses in Canton/Highlandtown, 1 I rent out completely, and another that I currently owner occupy and will rent once I meet the occupancy clause of the mortgage.  I'm curious to know what your 2 unit looks like as the converted rowhomes can be a little hard to work the layouts in. 

Make sure you get all your lead stuff in order before you rent that place out, it isn't that expensive or difficult to do it right and it will protect you from all kinds of nonsense.

There is also another facebook group called Patterson Park Connected Investors that is people who specifically work in the Canton, PP, Highlandtown area.

@Ned Carey  So my initial thought was to just buy out the ground rent since mine is covered under the 12% cap rate - that would put the break even at about 8 years and change.  However, if what Charles was saying is correct, not technically "owning" the land can change how the depreciation of the property works come tax time - and that would skew the calculation and add a few more years to the timeline.  What do you know about the tax implications of the ground rent?  Since this is so Baltimore specific, my googling hasn't turned up much on this topic.  

@Account Closed - wow, depreciating the whole amount sounds too good to be true.  I  feel like its really easy to come out ahead year after year if that's really the case, since the house has some pretty good value.  I'm definitely going to have my tax person look at that variable a little closer.  

@Rich Baer, Im glad to hear that. I actually remember it being discussed when we were closing but since I had never seen or heard anything from them, I just assumed it was being handled in escrow. I was a little surprised when I got a bill for 3.5 years of ground rent all due at once! 

My reading of the rules and regulations led me to believe that the government is trying to force ground rents out of the picture.  Im surprised that it is still something people are investing in as it seems like a dying game.

This is very Baltimore specific - fellow Baltimore real estate owners, what is your experience with ground rent?  Do you pay it with escrow or just directly to lease owner? 

I just found that a ground rent owner is required to sell to a property owner and that the sale price is set by law.  For me this would work out to a breakeven point of about 8.5 years.  Based purely on this, I'm inclined to buy out the ground rent owner just to simplify our lives. 

Does anyone have any idea what this would do to resale value of the home - owning the actual property outright as opposed to owning the building and ground renting?

@Ned Carey - I'm not sure I'm much past 80% LTV, if at all. I bought in with a 4% down FHA and even after 3 years and some decent money in on a reno, I think being at 20% equity would really depend on how the appraisal went. Is a HELOC even worth it, or possible with those kind of numbers?