All Forum Posts by: Peter McCauley
Peter McCauley has started 1 posts and replied 3 times.
Post: House Hacking a Single Family within Year 1 of Mortgage.
- New to Real Estate
- Charleston, SC
- Posts 3
- Votes 3
Quote from @Bill Hampton:
You will have to record and divide your expenses using rental square feet vs. personal square feet or rental bedrooms vs. personal bedrooms.
You will also have to factor in rental days vs. personal use days.
This is very complicated. You shouldn't try to do this on your own.
I recommend finding an accountant who specializes in real estate taxation and tax planning.
You may want to consider working with your accountant remotely to expand your options.
I would also recommend looking for a accountant willing to work with you throughout the year. You want an accountant who can help you strategize and who is responsive when you want to know the consequences of the financial decisions you are making throughout the year.
There are over 20 real estate accountants on this site. Reach out to a few and see who you like.
You can also ask members of your local real estate investors association for real estate accountant recommendations.
Good luck.
Bill thank you for the advice from the tax aspect.
Something that I haven’t considered is that my profession as a merchant marine leads me to a schedule of 3 weeks onboard, 3 weeks off of my ship. Meaning I’m only actually living in the home for a total 6 months out of the year.
Is that something that would dictate personal use days vs rental days?
If the renters living in the home with me sign a year lease, would I have any personal days for that year?
Thanks again for your response.
Peter
Post: House Hacking a Single Family within Year 1 of Mortgage.
- New to Real Estate
- Charleston, SC
- Posts 3
- Votes 3
Patrick,
Thank you for the advice and feedback. I will be sure to put a lease in place and contact a tax professional who has expertise in real estate. In terms of the loan(s), I currently have a steady and competitive W2 job and very low DTI, however I'll ensure to verify the rules and regulations for rental income when shopping lenders, so I don't hit a roadblock when buying the next rental.
Again, thank you for your response.
Post: House Hacking a Single Family within Year 1 of Mortgage.
- New to Real Estate
- Charleston, SC
- Posts 3
- Votes 3
I’m currently looking at purchasing a 3 bedroom / 2 bathroom Single Family as a first time home buyer. I want to live in one bedroom and fill the other two bedrooms with “Tenants” / old college friends that have agreed to pay rent if I purchased the house.
I’m very green and brand new to real estate investing so I wanted to make sure this was something actually feasible. I will be taking out a mortgage, but I won’t be putting 20% down and declaring it an income property, however, it will still be my primary residence. Do you still need to put 20% down on a house hack and let the lender know?
Also in terms of collecting rent, would I need a lease agreement, and account for this during tax season. Would anything happen if I just collected the money to pay the mortgage with no real book keeping? I just don’t want to commit either lender or tax fraud in the process.
Also for clarification, I plan on purchasing a Single family home in the next 6 months, live there for at least a year, then move out and turn it into a rental. However, if my old college friends want to live with me and help with the mortgage I thought it to be a great house hacking scenario.
Thank you for any and all advice.
Pete