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Posted: 7/24/2002 11:37:16 AM EDT
I am getting a 2br condo out here in the burbs to rent out. Looks like the deal is almost done. I need some help from the money dudes on this site. Where do I get a lease for the tenant to sign? should I go for 1 months security Deposit? One months rent up front? How about deductions on my taxes? Can I deduct car milage, expenses in advertising, etc? Help!! c-rock
Link Posted: 7/24/2002 11:43:19 AM EDT
[Last Edit: 7/24/2002 11:47:25 AM EDT by Aimless]
Link Posted: 7/24/2002 11:43:29 AM EDT
Originally Posted By c-rock: Where do I get a lease for the tenant to sign?
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Your lawyer should have some lease agreements or could make up some.
should I go for 1 months security Deposit? One months rent up front?
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You better believe it! Hope you have access to alot of asprin...
Link Posted: 7/24/2002 11:57:44 AM EDT
Has anyone recommended that you invest in aspirin?
Link Posted: 7/24/2002 11:58:18 AM EDT
I would also make sure that you state that a credit check will be run. With this in the ad, the scumbags will be less likely to try to get the condo.
Link Posted: 7/24/2002 11:59:50 AM EDT
Good luck
Link Posted: 7/24/2002 12:10:54 PM EDT
[Last Edit: 7/24/2002 12:17:04 PM EDT by WhiskeyBravo]
My brother and I owned a duplex together for a year that we rented out. Let me tell you right now that managing tenants can be a headache unless you have really good people in there. I have an [b]excellent[/b] contract for landlords that I obtained from Carlton Sheets (TV/ProEd Institute/lawyer/millionaire). I'll mail you all of his paperwork if you like. He really has everything you can think of nailed down to protect the land owner. I also have the background check sheets, inspection forms, etc. Edited to add it is best that the deposit be equivalent to 1 month's rent to protect you should the tenant break the lease by leaving unexpectedly without informing you. This covers you until you find a new tenant. By all means request both the deposit and 1st month's rent up front.
Link Posted: 7/24/2002 12:11:39 PM EDT
There are books written on how to manage properties, and some local junior colleges offer classes on real estate property management. Have you spoke with others in your area who own rentals on what pitfalls to avoid.
Link Posted: 7/24/2002 12:28:32 PM EDT
No offense intended, c-rock, but the cart's before the horse here. These are questions to which you should already have answers before signing an contract to purchase. Go to this site: [url]http://www.irs.gov/forms_pubs/pubs.html[/url] and select: Publication 527 Residential Rental Income Publication 550 Investment Income Publication 946 How to Depreciate Property for starters. These reference other IRS Publications and Forms, and they can be downloaded from this same site using Adobe Acrobat, which is obtainable free. Also see your accountant and attorney, preferably before you sign a purchase contract. Other questions to answer: *Who pays utilities? *Who pays refuse pickup? *Who mows, rakes leaves, shovels snow, etc. (if applicable) *Will you get references from the prospective tenants? *Do you realize that if you publicly advertise the rental that you must accept a gov't- subsidized low-income tenant if one applies? Have you balanced monthly income and expenses?, for example: *How much is your estimated gross monthly rental income? *How much is the real estate tax bill on the property, divided by 12 to get monthly amount? *If you are borrowing, how much is your monthly payment? *How much does liability and fire/comprehensive insurance cost for the property on a monthly basis? *How much are you allowing for maintenance? *How much for groundskeeping? *Will you be paying any utilities or refuse pickup, and how much on a monthly basis? Subtract all the expenses from the estimated income to get your net income before depreciation and taxes. Your annual depreciation will be essentially the cost of the unit that you will pay divided by 27 years, the time it takes to depreciate residential rental property. Divide again by 12 to get monthly depreciation, and subtract from the net income. The remainder is what you will pay taxes on, as explained in Publication 527. There's much more to it, but that's the Reader's Digest version. Noah
Link Posted: 7/24/2002 12:32:47 PM EDT
Originally Posted By Gun-fan: I would also make sure that you state that a credit check will be run. With this in the ad, the scumbags will be less likely to try to get the condo.
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Don't just tell them you are going to the credit report, run it. 1. Get them to sign a release form and have them pay for the credit report. 2.If indoubt blow them off. I would rather eat a couple months on the mortgage than get hassled month after month some asshole who I let slide on the credit check. (been there) 3.Make sure you take picture's of the condo before they move in. Makes keeping the deposit easier if they do damage. (been there) 4.Rent to strippers if you can. MY WIFE WILL NOT LET ME RENT TO COLLEGE GIRLS OR STRIPPERS. I don't know why ? 5.Make sure the condo is in a building that dosent have any clauses about rentals ! There are some that you can not rent out if the rent vs home owners exceed a certain percentage in the building this is just a few hints Good luck.
Link Posted: 7/24/2002 1:25:03 PM EDT
Link Posted: 7/24/2002 1:42:33 PM EDT
Is your last name Roper?
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