All Forum Posts by: Soh Tanaka

You can get some in Waukegan/North Chicago area with that price range. I am a broker, so PM me if you want me to feed you the latest listings to you.

I'm pretty sure TurboTax is fine for those with very simple financial life. 

However, once you have a rental property, things will get complicated really fast. It starts from the day you purchase the property. Most of us can't tell which item on the closing statement is deductible and which one needs to be added to the basis. Different items get depreciated over different length. I haven't used TurboTax in a long time, but my guess is it does not categorize automatically for you. 

Another tricky thing is when you spend money on some repairs/improvements. While some are straightforward, other items can get insanely complicated. Some of the items that you usually depreciate over X years might be accelerated by using Bonus depreciation, De Minimis Safe Harbor, Section 179, etc.

Chances are you are not going to save a ton of money hiring a CPA for this year, but I still think it's a good idea to get a good one. One reason is to have an accurate tax return, but also to educate yourself on how rental property is taxed. And we don't know what we don't know, so when you talk to a CPA, maybe you get some advice on things that are unrelated to real estate. 

Above is just my opinion.

My suggestion would be to go with QuickBooks. Reporting function is quite robust compare to what you can do with spreadsheet. Also, done right, you'll be able to see your mortgage balance, properties basis, bank account balance, escrow account balance, which tenants owe how much, etc. I used both a spreadsheet and QuickBooks, and I'll never go back to a spreadsheet.

It's better to buy the Desktop version. In order to use the class function, which is what you need if you have more than one property, you have to pay ridiculous amount every month if you go with the Online version. With 4 properties, it's no big deal to type in your transactions, as opposed to syncing with bank accounts.

@John Williams - I don't think anyone who is paying mortgage on time actually experienced it, and anyone even heard of someone experienced it. 

I'm not necessary suggesting to do it, but a lot of people just get a loan under personal name/personal property (NOT LLC) to get a better rate, then transfer the deed to the LLC.

My vote goes to QuickBooks Desktop version. You probably will run into some challenges initially, but resources specifically for landlords are plentiful. Once you get going, there is no going back, and you will not regret. 

It is true that some property managers are awful, but good one is out there if you look. With technologies, self-managing is easier than ever, even for the properties that are quite far. 

Just ask yourself these 3 questions. Do you have time to manage properties? Do you have the knowledge to manage properties? Do you have the desire to manage properties? If the answer is yes, then continue to manage yourself. 

The number of properties have nothing to do with whether you should manage yourself or not. I manage properties of owners who each only have one unit. I also know a lot of people who self-manager a lot of properties. 

While I do pay out to the owners the same month the rent is collected, there is actually a benefit to you by waiting till the following month. That is, if your PM company is sending you the payment after all the expenses are paid for the previous month, then you always have a clean and simple monthly statement. The way I do it, there might be some expense right after I send a payment, but that's not going to be reflected till the next month. 

As others said, you want to check what the agreement says. 

I'm pretty sure it's not "personal use."

I'm not an accountant, but it looks like you bought this purely for a rental purpose, so the simple answer is the amount spent from the day you purchased to the day the property was ready for service/rent (3 weeks after the purchase date or 8/13/19. Not sure what the gap between those two dates are) will be added to the property basis, and whatever you spent after that could be expended. 

You should start counting the fair rental days from 3 weeks after the purchase date or 8/13/19.