In most cases, the property manager ends up being the one truly running day-to-day operations, which makes it hard for the IRS to see you as “materially participating.”To meet REP requirements, two things have to happen:-You (or your wife) need to spend more than 750 hours a year on real estate activities, and-Those hours have to make up more than half of total working time for the year.The challenge is proving that level of involvement when a property manager is already handling leasing, maintenance, and tenant issues.

I am writing to seek assistance regarding a purchase I made a few months ago. I acquired the book "Real Estate by the Numbers" by J. Scott and Dave Meyer from the BiggerPockets bookstore. Unfortunately, I am unable to...

I'm not seeing fluctuations now vs. a few months ago that are having material impacts.

I’ve been hearing from a lot of investors lately about how renovation costs keep sneaking up — whether it’s materials, labor, or even permit delays.

. • This requires significant hours and material participation in real estate activities.• For someone working a full-time W-2 job, this is very difficult to achieve legitimately. 2.

During my studies, I learned a lot about building design, materials, and project management, and now I’m looking forward to starting my career in the construction industry.In my free time, I enjoy working on small renovation projects, learning about modern architecture, and spending time outdoors. 

That means more cash flow, faster pay-back, and smarter reinvestment.What Is Cost Segregation & Why STRs BenefitCost segregation is the process of breaking down a property’s purchase price (or renovation cost) and reallocating portions of it into shorter depreciation lives (typically 5, 7, 15 years) instead of being lumped into the standard residential/structure life (27.5 or 39 years).For STRs (especially where average guest stays are short and you materially participate) this becomes even more powerful:It accelerates write-offs and frees up cash sooner.It helps you convert your property into an “active business” rather than passive income in the eyes of the IRS, making more deductions usable against other income.Personally I'm a realtor which makes it easy to gain "material participation" as I am classified as a "real estate professional"There are ways to structure a property that is managed by someone else and still qualify.

Had quotes for $20,000 not including materials. 

I can say confidently that the material participation hours do get prorated by when the property goes live so that is why many do it at the end of the year.Did you purchase your house before Sept 27, 2017?  

Yes, if the average stay is 7 days or less and you materially participate, short-term rental losses can offset W-2 income.