How do you deal with selling rentals and depreciation recapture? Real Estate |
- How do you deal with selling rentals and depreciation recapture?
- Cash at closing vs taking money off sale price?
- (Update) How many repair requests is too many?
- Hard working agent
- Bought a house that has a renovated garage with no permit (Nevada)
- Any other buyers experiencing decision paralysis?
- Why Terrazzo?
- The Slab is a Lie
- Can I back out before inspection? (WA State)
- [WA] Any concerns with buying 3 floor townhouses?
- My husband and I want to buy in suburban Chicago but the real estate market has been surprisingly flat. The homes we’ve looked at are selling for almost no profit (20k) over 10 years or at a loss. Should we just rent in suburbs and buy a condo downtown and rent it out?
- We are about to make an offer on a house but just found out that there is an oil tank. What is this and how should we handle it?
- Buying a New House
- French or Sliding Patio Door
- All done now that we received our Closing Disclosure?
- Better to sell my house before I expatriate or rent it out?
- Convert garage into bedroom
- appraisal
- NON RESIDENT lending in Australia
- Massive mortgage but worthless house?
- House purchased as rental via 1031 earlier sale, then eventually made into primary - selling it
- Legal, Code of Ethics, or nothing at all Question
- First time home buyers putting offer on house near San Francisco and waving contingencies
- Risky to buy a house with a low tax assessment?
| How do you deal with selling rentals and depreciation recapture? Posted: 16 Apr 2019 10:18 AM PDT Ugh. I was so surprised doing my taxes. Very frustrating. We owned a rental for 12 years. Bought it for $108K at the end of 2005. Sold it last November for $97K. Even though I sold it at a loss, I had paid loads down on the mortgage and refinanced it and took money out twice. We made the decision to sell it after our long time renter moved out. We were okay with getting $97K because it was going to take $20K to repair and update it. That would be fine if we still lived there, but since we live across the country, we decided to sell in order to invest locally. HELLO depreciation recapture! HOLY CRAP! No one told me about this! So here is how it works. Every year your rental depreciates and you take that and along with your other costs, (insurance, mortgage, utilities, taxes, supplies, travel, etc) and it lowers your income. For example, after everything this year, we went from making $13K in rent payments to $900. So that lowers your taxable income. Hooray! But if you sell your rental for more than the depreciated amount, then you have to pay that amount back at 25%! So over the 12 years we took $44K in depreciation. So our house, tax wise, should have been valued at $108K - $44K = $64K. but we sold it for $97K. So on paper, we made $33K and had to pay taxes on that to the tune of 25%! OUCH. And now my adjusted gross income says that we made a lot more money that we really did. Makes me wonder if I should have never taken depreciation and just paid the taxes all along. I do understand that if I use the property exchange that I can sort of avoid this? Not sure how. Maybe someone can ELI5. How do I avoid this in the future? Just...never sell my rentals? Really appreciate your feedback! [link] [comments]  |
| Cash at closing vs taking money off sale price? Posted: 16 Apr 2019 08:08 PM PDT Basically what's the difference and is one significantly better than the other? I've been asking for cash at closing but the seller is wanting to taking money off the sale price. Not sure if I should push for one over the other or if it really makes any sort of material difference. [link] [comments]  |
| (Update) How many repair requests is too many? Posted: 16 Apr 2019 04:15 PM PDT I got a lot of replies on my post a couple days ago asking how many repair requests are too many. https://www.reddit.com/r/RealEstate/comments/bd965v/how_many_repair_requests_is_too_many/ Just thought I'd post an update in case anyone else finds the info useful. Apparently the 8 items we requests repairs for weren't too many, or at least not too many for our seller. They got back to us this morning and signed the contract to make all the repairs. After reading all the replies on my post, I'm really surprised! I'm not sure if we just got lucky or the sellers were feeling generous or our realtor really knew what she was doing...but hey, I'll take it! [link] [comments]  |
| Posted: 16 Apr 2019 08:28 PM PDT I looked at single-family homes with my agent three separate times. I put an offer on one home and, due to rotting old pipes and non-grounded wiring and tons of other fixes, I bailed after the inspection. I was outbid on another house I wanted. And the other houses were badly in need of repairs. My budget is small (around 200K) so there aren't many good houses out there in my price range. I've decided to give up the search for homes and continue to rent. What can I do for my agent to show my appreciation for her time? [link] [comments]  |
| Bought a house that has a renovated garage with no permit (Nevada) Posted: 16 Apr 2019 06:04 PM PDT Basically I was young and clueless, and was getting kicked out of mother dearest's house.. So 4 years ago, I bought a house with high interest rate, and a renovated garage with no permit. (I just found out about the permits a few days ago when I reviewed my documents.) I didnt even care to ask or know if the renovation had permits, I happily signed every paper that the agent gave me. (I know I know) It was a mixture of desperation (mumcy dearest kicking me out) and stupidity. Moving on. 3/4th of the garage was turned into an extension of the living room, while 1/4th of it was maintained as a motorcycle parking for the previous owner. I wanna get permit for this since it can be an insurance liability. Knock on wood. It looks well done, But Im afraid the city might make me tear it down. Or they might ask why I didnt do anything about this for the last 4 years. Or give me a hefty fine. Money is a bit tight right now. So this is very scary for me. Help :( [link] [comments]  |
| Any other buyers experiencing decision paralysis? Posted: 16 Apr 2019 08:59 AM PDT It's come time to make an offer on a house we will have seen three times now, as there is an offer in and they are calling for highest and best. We know what that offer looks like for us and it's not a financial stretch. Personally, I am excited. It's a smaller yard than I wanted for our dog, but it's a great neighborhood and a solid house that I think we can update beautifully. As we've looked at other houses, both my husband and I keep comparing them to THIS house. My husband is having a hard time committing, and it's causing him a lot of anxiety. He's focusing on the few things he thinks he'll really regret about buying this house in particular and can't get comfortable making a decision. We currently own our home and he's had many regrets about this one too. It's hard for both of us to separate his decision paralysis (which is a common issue for him) with legitimate concerns about a major financial and lifestyle decision. Is anyone else struggling with this? How do you handle it? [link] [comments]  |
| Posted: 16 Apr 2019 08:55 PM PDT I am currently looking for a house in the New Orleans metro area, and I have been seeing a lot of 1960s-ish houses with terrazzo flooring. Personally, I think it's ugly, and it reminds me of grocery stores from my childhood, but most agents write about it like it's the holy grail of flooring finds. One agent even wrote in the agent notes how it is suspected that the original terrazzo floors are under the engineered wood floors and added enough exclamation marks that clearly this should make the house sell itself. Can anyone explain what the insanity over terrazzo is, by chance? [link] [comments]  |
| Posted: 16 Apr 2019 02:29 PM PDT Short story: Longer Story: We bought a house in 2014 after jumping through every hoop and performing every inspection the bank and insurance companies required. On inspection day I saw several very troubling things. When I asked the home inspector, he laughed at me - He said I didn't know what I was looking at, it wasn't water damage/that thing was totally normal and not at all worrying, etc...etc... Sadly - I was right. Instead of the house being on an old stone & concrete foundation, with extensions built on full depth slabs around it...there's just the original stone basement foundation (parged to hide degradation?) and with various blocks laid around the base of the walls - trapping water in the foundation walls. The extensions were built directly on the ground - no foundation at all. The "slab" everyone saw was a thin curb/ring to keep surface water from running on to the framing box. The foundation is a lie, or useless. Contractors I've brought in to look at this (and other issues) have no idea what the inspector was doing. "He saw this? And passed the inspection?" Then they start and stop many sentences while pointing out several things that "alone" would have made the house un-mortgage-able. They have all been clear that what is broken cannot be fixed. (There aren't enough beams to put the house on jacks, the box and vertical beams are too rotten to replace the beams, etc., it's a catch-22 situation where the chance to fix this place passed at least 10 or more years ago.) There are currently termites (the swarmers led us to these issues). Based on the swarm size (And how fast they were coming out of the concrete) it wasn't a new one, it has "been growing under here for years." Basically the house will need to be condemned in a few years - assuming it doesn't need to be condemned already (all the contractors ran away before they could see anymore). I'm with a mortgage. I'm planning to tear it down and rebuild with prefab. I have alot of in-law involvement to make sure this goes right. (they are various contractors). The prior owners have no assets for me to go after. I have no desire to sue anyone or expose them to prosecution or ruin their life anymore than this old house has. I'm in rural NY State (not city), with a national bank for my lender (who is the 4th or 5th holder of my mortgage, & I've never had a late payment). What should I do? Who should I call and tell what? Or not call? Mortgage bank? My homeowners? A lawyer first? Anything I say or don't say? Thanks for any help or advice. [link] [comments]  |
| Can I back out before inspection? (WA State) Posted: 16 Apr 2019 09:31 AM PDT I've got an offer on a condo, accepted Sunday night. I have not deposited the earnest yet. Can I back out now without penalty? I know it's shitty of me, but a more affordable house (and not condo, no HOA fees, plus a big yard for my kid) came on the market today, closer to my in-laws and in the school district we most desire. Edit: Thanks for the advices. I'd have been able to back out via HOA review, but decided against it. I didn't involve my broker because we've been "slippery fish" looking for a diamond in the rough in our area (left after inspection on one property due to structural concerns, pretty strict deal-breakers which are hard to satisfy for our price point, lots of house showings over 2 different counties with nothing ever quite right) and I wanted to be sure I liked the new house and could even actually walk on this place before making my broker worry unnecessarily. We left a house we loved across the state for my husband's new job, and we thought that was our forever home when we bought it. After going to see the house that came on the market today in person, I quickly realized I actually love and prefer the condo we're in contract with for our current lifestyle. The house with a big yard can wait. It's amazing how emotional this decision can be! [link] [comments]  |
| [WA] Any concerns with buying 3 floor townhouses? Posted: 16 Apr 2019 09:35 AM PDT We are currently looking for a home new Bothell area near Seattle. We found one developer building townhouses, it is significantly cheaper than single family homes ($50k cheaper for same size) and selling well. They have both 2 story townhomes and 3 story townhomes, the 2 story townhomes are pretty much sold out while the 3 stories (around same size, slightly cheaper) are available in mass, so I was wondering if there are specific turnoffs for 3 story townhomes and if I should avoid it. [link] [comments]  |
| Posted: 16 Apr 2019 10:02 PM PDT |
| Posted: 16 Apr 2019 09:22 PM PDT Hello, we will be making an offer on a house and we just learned that it has an oil tank. From my brief investigating I have found that they are used for heating I believe. I do not know if it is active, empty or decommissioned. However, can anyone provide any advice for this? If it is active, should we ask the seller to pay to have it emptied and confirmed empty? Thank you for any help! [link] [comments]  |
| Posted: 16 Apr 2019 04:44 PM PDT Hey guys, I'm just about to purchase a new construction spec home (already built) in the state of MO. What should I be on the lookout for? How does this process generally go from here? I haven't signed any contracts or gotten a mortgage yet. I've only negotiated the price of the home. [link] [comments]  |
| Posted: 16 Apr 2019 09:12 AM PDT We are replacing our sliding patio door. We are likely going to sell our house in a few years. Would French doors or another sliding patio door be more appealing to future buyers? Same price, same style. [link] [comments]  |
| All done now that we received our Closing Disclosure? Posted: 16 Apr 2019 10:29 AM PDT Hey all, it's me again 😅 You guys have been an awesome help and now, it's our turn to finally close on our first home!! We close Friday at 4pm so.. 3 days from now. We just received our Final Closing Disclosure and it looks great and it is actually about 700 bucks cheaper and about 30 bucks cheaper a month so, that is amazing, haha. Now, we are good to go, correct? We have the amount we need to bring via Cashiers Check and we have the proof of funds came out of our Bank account. Title is all good.. House is all good.. Everything is good now. Utilities are transferred to our name as well This is the end of the 40 day long process, right? Haha.. They will check and call our work and run credit right before closing so, no quiting (duh) and we won't be buying anything until after closing anyway so, we won't open or charge our cards up haha What else should we do before closing? I want to make sure we aren't missing anything. This has been a huge stressful mess, lol Thanks all :) [link] [comments]  |
| Better to sell my house before I expatriate or rent it out? Posted: 16 Apr 2019 08:09 PM PDT Tl;dr: I own and live in a house in a Virginia college town where where prices are going up and demand for rentals and purchases is high. I'm planning to expatriate once I figure out my house situation, and I don't think I'll live here again. Renting would be profitable, but repairs are looming and property management fees will really dig into the profit. Or I could just sell now, pocket (hopefully) $90k, and avoid the capital gains tax. What would you do? My situation: I hope to make the most out of my house for medium to long term financial security after I leave the US. I'm currently 3 years into a 30 year mortgage, and the house value has gone up due to appreciation and some renovation. I have decent savings that I'm willing to invest over the next several years if it's a good investment. I won't be generating much savings in the foreseeable future though, nor do I anticipate many financial liabilities. The numbers:
Likely major maintenance:
So - what would you do in my situation? Many thanks for your thoughts and opinions! [link] [comments]  |
| Posted: 16 Apr 2019 08:01 PM PDT Hello I've been house hacking my way up and for my current place I have three bedrooms and we don't really use the garage. Has anyone had any experience and want to guesstimate costs for converting a garage into a bedroom? Cost of adding a bathroom to it? Permits / legal things to consider? I live in Texas FWIW, house built in 93.. I've considered just living in it myself to make it less risky than if I rented it as a bedroom. Thanks in advance for any insights :) [link] [comments]  |
| Posted: 16 Apr 2019 06:56 PM PDT If my subject property has accordian shutters, what kind of adjustments would you give on an appraisal with 3 comps having 1)No hurricane protection 2)panels 3)impact windows [link] [comments]  |
| NON RESIDENT lending in Australia Posted: 16 Apr 2019 06:55 PM PDT Hi All, Looking for some advice from the community. The Australian market for non resident lending is nearly non existent. All of the major banks have pulled out of this space. There is only 1 non bank left which is La Trobe and the rate is really high at 6.99% + fees. Most recently Pepper Money closed down their black lotus product targeting Chinese buyers. So right now im sitting in an office that has access to private lenders that 99% of brokers in Australia do not have access too. Offering rate as low as 4.79% for 25-30 year term loans and 6.80% for 12-18% short term loans. My target is Chinese buyers. But im open to any suggestions.
Im at a loss really. Ive tried linkedin, facebook group posting, contacting local agents in the mainly Chinese areas to see if they have buyers or contacts in China. [link] [comments]  |
| Massive mortgage but worthless house? Posted: 16 Apr 2019 03:03 PM PDT Hello! I am a real estate agent. Happened upon a property that is boarded up, vacant, and has deferred maintenance. I also invest so was interested in buying it. Looked up some details on the property and saw something quite curious in the tax record. Under the mortgage history of the tax record is shows that the property has been refinanced multiple times via a two lenders. The property is currently owned by an LLC since 2016. A mortgage in the amount of $1,490,300 was pulled on 09/28/16 with mortgage company 'A' then an amount of $200,000 on 01/24/17 with a private lender then an amount of $1,288,050 on 10/19/17 again by mortgage company 'A' then an amount of $282,149 on 12/06/17 again by I'm assuming the same private lender. The owners have been served a notice of default on 01/07/19 and is currently on pre-foreclosure status. The kicker is: the house is worth ~$300,000 on an 'as-is' basis. Not on a large lot. In a lower class neighborhood. In California, Bay Area. I cannot wrap my head around the mortgage history and was just curious if anybody around has any idea what went down here? Thanks! [link] [comments]  |
| House purchased as rental via 1031 earlier sale, then eventually made into primary - selling it Posted: 16 Apr 2019 06:34 PM PDT Have 8 rental properties now, trying to move into rentals to beat the capital gains over time. In this case, looking at selling the rental property we moved into and made our primary (have lived in it for 5+ years now). Trying to determine what my tax ramifications will be, and if anyone has done this on here. [link] [comments]  |
| Legal, Code of Ethics, or nothing at all Question Posted: 16 Apr 2019 05:46 PM PDT Today my realtor scheduled a showing of the home I am selling. This is the second time that this prospective buyer would be here as he wanted to take his mother/father to get their input on the home. My realtor, which is the buyers realtor as well, scheduled the showing with me and asked me to keep the door unlocked so they could get in. I did leave the door unlocked as I was leaving the house 5 minutes before they were scheduled to arrive. I was notified by my Canary in home security camera when they arrived. Around 20 minutes went by and I checked my Canary again to see if they were still there. I was waiting until they had left before I went home. Upon checking the video again I see the prospective buyer on the phone with my realtor who was not at the property. She was on speakerphone and saying she would meet them at a different location to look at the paperwork as she was traveling from elsewhere. After I heard this I went back and reviewed the footage in it's entirety and my realtor was never present on my property the entire time of the showing. Granted I actually know the people that were looking at the home but my realtor doesn't know that I know them. I called my realtor to ask her how the showing went and she said, "we were there for quite a while, yes we were there for a while so i think it went really well." She knowingly lied to me about being present at the time of the showing. [link] [comments]  |
| First time home buyers putting offer on house near San Francisco and waving contingencies Posted: 16 Apr 2019 05:28 PM PDT My wife and I would like to put a bid down on a house and with the current market of SF, we're told we'll lose the bid, if we put an inspection contingency on the house. So, we're left with what the the seller has done with inspections. Also, we have a set of 26 pdfs about the property sent from our real estate agent which was gather from the seller.
Section 1 problems include: - $8,615 in infestation fixes. - gutters need to be replaced (no price) - standing water in in the "sub area" and there couldn't be an inspection. - roof has a exposed nail heads and seems quote "amateurish". Other Problems: - Private Sewer Lateral (PSL) is not compliant. Estimate included for $6,200 Other Consider: -Anchor bolts can be found in the foundation. Foundation appears to be in serviceable condition - Roof is newer, approx 1-3 yrs - Tankless water heater, manufactured 2019 - Furnace manufactured 2018 - French drain installation. [link] [comments]  |
| Risky to buy a house with a low tax assessment? Posted: 16 Apr 2019 05:13 PM PDT My wife and I are looking at buying a house in Oregon as our primary residence. We found out the house recently got permitted for a second bathroom which was put in years ago. I called the tax assesment office for the county, and not only do they not have the current property taxes based on the additional bathroom, but it is being assessed on one fewer bedrooms as well. This house has been sold multiple times since these changes were made to the house, and the taxable value based on the changes haven't been updated. Should I be concerned that during the sale, it could be reassessed and have the taxes on the property drastically increase? This house is already at the top end of our budget, and a big increase in taxes could push our monthly payments into an uncomfortable area. Is there a way to know how and when a reassessment would be triggered? I am very new to house buying and appreciate the insight. [link] [comments]  |
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