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Thank you very much for all your advices. I'll contact my insurance agent for the change. Economy is one thing but I find it's too much red tapes in LI, I find the people in the township are very nice and helpful, however, the system is "Oh"! I am still not understand the complicated tax system in USA even though I don't need to declare my income. All in All, I REALLY like LI, the places and the people!!!
sxmhousewife - I'm throwing in my unsolicited 2 cents:
If you decide to rent out your house, you need to do the above with a few more suggestions:
1. Take out at least a $1 million umbrella policy, as well as the suggested dwelling insurance.
2. Hire a real estate attorney and draw up the tightest rental lease you can think of. You have to cover any and all possibilities that can happen. Do not just use one of those general rental leases you can buy at a stationery store. They hardly cover anything. Your lawyer will add on a tight rider to cover all eventualities. Look at some good sample leases to get an idea of what needs to go in there. You'll probably end up with a 4-page rider agreement.
3. Since you'll be a long-distance landlord, you need to hire a management company - but be sure it's a good one that is tough (and fair) on tenants. They usually charge 10% of the rent. From my own prospective as an absentee landlord who was only 45 minutes away, some tenants (most) need a babysitter to make sure they're not destroying the property thereby causing you expensive fixes.
4. You need to develop a tough attitude. Tenants will walk all over you if they detect that you're a decent, fair person.
5. Take out a landlording book out of the library so you understand what landlording responsibilities are. Most problems come up when people try to be landlords, but really don't have a clue what their responsibilities are regarding the dwelling and how it's to be run, and what the legal responsibilities are.
6. If you can hold out until the house is sold, do so. The stress, aggravation, and expense of carrying a house rental usually isn't worth it. After a year's rental, you will have some repairs to get the house ready for the market again. If you can get your house sold in a half year by lowering the price, do so. Get rid of it. You'll feel a lot lighter.
A lot of people seem to think that you can write off your mortage as an expense when renting..it's only the interest, in addition to maintenance and taxes.
You can choose to take depreciation or not..it's usually better to take it now as the tax rate on income is higher than that on capital gains, and will probably stay there as long as Grover Norquist controls the Republicans in the Congress like lap dogs.
Good points. Very appreciate for all those info. Now I've to find an attorney. But there are more and more "For Sale" signs around the neighbor, my real estate agent did bring some couples, they like my house but the problem is the same, they cannot get the mortgage!! Now it's closing to winter and I do think people like searching around in the cold weather, so I have to wait unit late spring. My concern is the responsible tenant to stay here as their own house.
Quote:
Originally Posted by AndreaII
sxmhousewife - I'm throwing in my unsolicited 2 cents:
If you decide to rent out your house, you need to do the above with a few more suggestions:
1. Take out at least a $1 million umbrella policy, as well as the suggested dwelling insurance.
2. Hire a real estate attorney and draw up the tightest rental lease you can think of. You have to cover any and all possibilities that can happen. Do not just use one of those general rental leases you can buy at a stationery store. They hardly cover anything. Your lawyer will add on a tight rider to cover all eventualities. Look at some good sample leases to get an idea of what needs to go in there. You'll probably end up with a 4-page rider agreement.
3. Since you'll be a long-distance landlord, you need to hire a management company - but be sure it's a good one that is tough (and fair) on tenants. They usually charge 10% of the rent. From my own prospective as an absentee landlord who was only 45 minutes away, some tenants (most) need a babysitter to make sure they're not destroying the property thereby causing you expensive fixes.
4. You need to develop a tough attitude. Tenants will walk all over you if they detect that you're a decent, fair person.
5. Take out a landlording book out of the library so you understand what landlording responsibilities are. Most problems come up when people try to be landlords, but really don't have a clue what their responsibilities are regarding the dwelling and how it's to be run, and what the legal responsibilities are.
6. If you can hold out until the house is sold, do so. The stress, aggravation, and expense of carrying a house rental usually isn't worth it. After a year's rental, you will have some repairs to get the house ready for the market again. If you can get your house sold in a half year by lowering the price, do so. Get rid of it. You'll feel a lot lighter.
A lot of people seem to think that you can write off your mortage as an expense when renting..it's only the interest, in addition to maintenance and taxes.
You can choose to take depreciation or not..it's usually better to take it now as the tax rate on income is higher than that on capital gains, and will probably stay there as long as Grover Norquist controls the Republicans in the Congress like lap dogs.
wrong ,wrong , wrong, you can not choose whether to take depreciation or not.
When you sell a rental real property you are subject to recapture on the depreciation that was allowed or allowable. What does this mean? Depreciation that is allowed or allowable means that even if you did not take the depreciation, if it is allowed you will have to recapture it.
the IRS will recapture based on the depreciation ALLOWED (determined by taking the straightline deduction over 27.5 years) whether or not you actually took it.
Last edited by mathjak107; 10-12-2012 at 05:36 PM..
wrong ,wrong , wrong, you can not choose whether to take depreciation or not.
When you sell a rental real property you are subject to recapture on the depreciation that was allowed or allowable. What does this mean? Depreciation that is allowed or allowable means that even if you did not take the depreciation, if it is allowed you will have to recapture it.
the IRS will recapture based on the depreciation ALLOWED (determined by taking the straightline deduction over 27.5 years) whether or not you actually took it.
A lot of people seem to think that you can write off your mortage as an expense when renting..it's only the interest, in addition to maintenance and taxes.
You can choose to take depreciation or not..it's usually better to take it now as the tax rate on income is higher than that on capital gains, and will probably stay there as long as Grover Norquist controls the Republicans in the Congress like lap dogs.
all write offs mean is your spending 4 bucks out of pocket and getting back maybe 1. all things being equal you dont want writeoffs ,you want less expenses and more profits.
the expenses only help offset the taxes on the rental income. the only thing that may help your regular income is the depreciation allowance.
but unless your in a very high tax bracket over 25% right now you will have to pay that back when you sell whether you took it or not so its not really that much of a bonus.
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