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In most jurisdictions he'd see a bump in property taxes, for one there's now two residential units where there used to be one.
In Maryland the calculations would be based on the owner occupied unit being one assessment base while the rental is another and not subject to the owner occupied cap.
Earlier someone said that Minneapolis had dropped a lot of the conditions for duplex conversion, mainly the off street parking requirements. That will come back to bite them in a fairly short time.
The other thing OP needs to think about- and this is major- is impact on taxes at sale. Turning a single family into a rental has huge tax implications in terms of depreciation recapture and capital gains.
If OP plans not to inform the local gov't or the IRS that he is getting rental income- now that opens up a whole other can of worms- like tax fraud. There are also insurance and liability issues. A landlord cannot keep an owner occupied property policy.
Lots of considerations go into having rental property and even room mates. The OP really needs to get thoroughly educated if serious about becoming a landlord.
The other thing OP needs to think about- and this is major- is impact on taxes at sale. Turning a single family into a rental has huge tax implications in terms of depreciation recapture and capital gains.
If OP plans not to inform the local gov't or the IRS that he is getting rental income- now that opens up a whole other can of worms- like tax fraud. There are also insurance and liability issues. A landlord cannot keep an owner occupied property policy.
Lots of considerations go into having rental property and even room mates. The OP really needs to get thoroughly educated if serious about becoming a landlord.
I don't want to become s full-time landlord. I simply want to rent out part of the (massive, for me as a single, at least) home to someone.
I mean my mortgage is like $790 a month. MrRational thinks I would be wise to sell the home, pocket all the equity and move to an apartment.
But where am I going to find an apartment that is less than $800 a month?
Of course when I factor in all my monthly expenses, my bills per month are about $1500 (that includes all things related to my car(s) which I use for work), but still, I don't know if it would be wise for me to sell the house currently and get into a small apartment.
Maybe it would be, but I definitely want to consider all my options before I moved on from the home.
I don't want to become s full-time landlord. I simply want to rent out part of the (massive, for me as a single, at least) home to someone.
I mean my mortgage is like $790 a month. MrRational thinks I would be wise to sell the home, pocket all the equity and move to an apartment.
But where am I going to find an apartment that is less than $800 a month?
Of course when I factor in all my monthly expenses, my bills per month are about $1500 (that includes all things related to my car(s) which I use for work), but still, I don't know if it would be wise for me to sell the house currently and get into a small apartment.
Maybe it would be, but I definitely want to consider all my options before I moved on from the home.
Right now you have appreciating asset. What would you have except a pile of rent receipts if you sold the house and then rented?
Right now you have appreciating asset. What would you have except a pile of rent receipts if you sold the house and then rented?
Yes.
I don't make a lot of money (roughly $20/hr) but I don't have a bunch of bills either, my credit is good and I have $75k in my checking account.
I think Mr.Rational thinks I don't make enough to make a mortgage work. I am not sure. I've always been pretty frugal - I've always been disgusted by the thought of having car-payments, for example.
A) you should never have bought THAT property to begin with
B) everything else going on since has been about making up for that error
C) extract yourself from the problem property entirely -even at a loss if needed
Then...
D) if you NEED a housemate/tenant of some sort to make a budget work (and you do)...
E) choose a property that actually meets your needs, has those features/amenities required, from the outset
F) that choice does NOT have to mean a purchase.
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