All Forum Posts by: Jeremy H.

I wanted to buy an investment property for rental.

my payments on my primary residence will hit the limit for mortgage interest and property tax deduction under the proposed GOP tax plan.

But as I recall doing my taxes on rental property before, the mortgage interest and property tax falls under business expense and is not affected by new GOP tax plan?

I plan to split the down/month payment, and income / expenses with another family "couple" 50/50, is there issues there?

if we do not setup an LLC , could we both be able to claim this as a business and its expenses (50% of the numbers) etc. Last time I did not have LLC and just reported the rental income and deduction but I was the only person owning the investment property.

so one more situation.  I know the policy cost for the rental starting in June.  I did actually sell the property before the end of the year.   I got a refund check for some of it.  

Then do I still enter the policy amount for one year or I subtract the refund check first?     

I am running into a problem finding this number.

Let's say my property converted from personal to rental in June.  I cancelled the regular home owner insurance around June, to purchased a new policy that is rental insurance (mostly, it's a fire insurance).

So there is 2 policies that needs to be pro-rated  (home owner,  and rental policy).    Do I just deduct the insurance for the rental period (June - end of year)?    I am just having trouble coming up with the pro-rated number, it's probably like $150 and I don't want to get audited having to proof the number. 

Am I better off not deducting anything in this field?

Or do I enter the total expense insurance (both policies pro-rate) and the IRS formula will proportion them based on # of days?

It is not a investment property, it is primary residence mortgage I want to apply for.

When I looked at some houses with addition (permitted, not garage convert type) that has a separate entrance that could be rented out. Is it possible to consider potential income in the DTI for mortgage application?

I am guessing you cannot count it, or else similarly you can say you would get a renter or roommate in your living space and ask the bank to count it .

If the property sat vacant for most of 5 years do I owe capital gain taxes or not?

Here is requirement on intuit site in order not to owe capital gain taxes

• You owned the home for a total of at least two years in the five-year period before the sale.
• You used the home as your primary residence for a total of at least two years in that same five-year period.
• You haven't excluded the gain from another home sale in the two-year period before the sale.

regarding the application form,

whether you e-mail or hand out a paper copy to them while or after showing the property.

How does it get returned to you exactly?    Do they drop/mail it to the rental property mailbox?

thanks for all the input. We have come to an agreement for the loss of rent. It is not until the original lease expiry but enough time for me to look for a new tenant just as if the lease was terminating soon. and also get them to keep the utilities open for a while.  Since it is a vacant house it will not be much.  

Hi. Is credit score of 675-680 + a good criteria?  Also regarding the 3x rule.   If the rent is $2000 a month.  They must be making $6000 a month before tax (gross income).  Is this correct?

If a potential tenant has seen the ad on Zillow or craigslist.

Do we setup a time to see the house, at that time give them an application form?

The application is a template from Zillow, just have personal info and bank account balance(s), have you been evicted, etc.

The part I am most confused about is the credit check, when do you run it and who pays for it?  How about a refund if they don't qualify?

Which website do you recommend to do credit AND background check?

What about verification of income?  Do you ask for a last year's W2?

Thanks

Hi, Penny and others.

I was wrong about the contract not including a clause.

I found it in the (CAR form)

I also found CA civil code that is more detailed version of this clause.  But the thing I wanted to see is that it says the security deposit can be withheld for the purpose.  In case the tenant says they cannot afford the lost rent but I have it right here, it's in the security deposit.  And that we have something to refer to instead of going to civil code. 

I found it conflicting that the deposit needs to be returned in 21 days.  What if there is no new tenant yet in that time, very likely.  

"30. BREACH OF CONTRACT; EARLY TERMINATION: In addition to any obligations established by paragraph 29, in the event of termination by Tenant prior to completion of the original term of the Agreement, Tenant shall also be responsible for lost Rent, rental commissions, advertising expenses and painting costs necessary to ready Premises for re-rental. Landlord may withhold any such amounts from Tenant’s security deposit. "