All Forum Posts by: Paul M.

You would fall under the 2 out of the last 5 year rule. So you could technically rent it out for 3 years, but I wouldn't wait till the last minute to sell.

I've *never* heard of the the creation of a rental property cost basis.

Consider just selling to make your life easier.

In my market, Boston, where it is cold in the wintertime, fewer people want to move in the winter, so if you have a vacancy, you will have a harder time finding a tenant. Also Sept 1st is when there is the most demand. For this reason, I generally keep everyone on 1 year leases that run Sept 1-Aug 31st or through July 31st if I want to build in a month to do some renovations.

If I was in a market with less seasonality, I would probably do month to month for the reasons suggested. Maybe with a 2 month notice period though just so I could plan time to do the showings.

J Salter, how does one place a positive note on a tenant's credit report?

Real estate prices in cities are generally multiples higher than in remote areas. EG Boston, New York, San Francisco, Chicago, DC, Seattle, Austin, etc etc prices are higher than small towns far from major metropolitan areas and generally prices downtown are more expensive than the suburbs in this period of history.

Do you think, over the next few decades that the internet will ever serve to bring down those big city real estate prices relative to less expensive areas. EG telecommuting, 3D printing, etc. will advance in the future, will they bring down demand?

So far they don't seem to have had a measureable effect, but presumably 20 years from now, we'll be better at online collaboration and fewer people will need to go into an office. If say 50% of city workers no longer needed to work in an office, presumably many of them would consider living elsewhere.

For those of use following a buy and hold strategy in a major metropolitan area, this could cause a problem for us a couple decades from now.

Mark,

Read the posts after my first one in that thread, esp the ones by Keith. It is not generally known that you can no longer rent out a place for years and year, then move into it for 2 years and take the 250k exclusion. Unfortunately that was taken away.

Fortunately for you that is not your situation. You lived in it first so you just have to deal with the more well known 2 out of last 5 rules.

According to this post: http://www.biggerpockets.com/forums/51/topics/70981-turning-personal-residence-into-rental-property

the proration doesn't apply to when you live in it then rent it out afterwards, then it is just the 2 out of last five year test, but it does apply if you rent it out then live in it.

Hopefully other respondents have more experience, but I would suggest trying a local bank.

I usually give people one free pass (though the bill shouldn't have come to $300 and I can often snake the toilet myself) on the expectation that they change their behavior and that my goodwill bank has a credit balance for the next time I have to ask their forgiveness when something isn't fixed right away or something.

I am an accountant and I would recomend Quickbooks over Quicken Rental Property Manager. Quicken is great for managing your personal finances, when you start having receivables/payables/P&L reports by property etc it seriously breaks down. I made a good faith effort to try to make it work for a bookkeeping client of mine but it was too frustrating.

I prefer the QB contractor industry edition, though it doesn't matter too much for most people.

In my market 2-3 unit properties are the most common building type and it would be for me to even consider buying a single family as an investment. I get great tenants.

If in your market they are considered undesirable by tenants then maybe the calculus is different. However I think we need more info either from your friend or from people who live in your area. Might have been other factors at play. Maybe your friend wasn't good at finding tenants, maybe it was a terrible area. It just seems hard to believe that there is any part of the country where in a nice neighborhood for a reasonably decent condition apartment that only terrible people would want to rent in a 2-3 building.

What are your thoughts on incense. Is it like smoke-does it stay in the walls long after a tenant leaves? Or is it harmless so long as none of the neighbors are complaining?