No, you don’t want to fool around with your “principal residence”. You probably declare mtge interest and property taxes on Schedule A for your current residence. The rental property will have a basis for depreciation. If you live in one of the units, you can’t depreciate it. And if you continued to deduct your “home” deductions, that would be fraudulent.
Don’t pretend to live in your investment properties. It would cause you years of headaches.
Are there a lot of successful investors doing low/middle income apartments?
I know there a lot of turnover, more maintenance, and evictions but it is easier to get finance and requiring less funding.
Can a biginner start with this, what are some of the most important tips to be successful, say with 4-10 units? Does using property management company help so this won’t take much of your time from f/t job?
Thanks Frank and Randy for good advise. I agree 4-unit is a good start.
I already own a home and have good equity, thinking of using HELOC for some down payment if needed.
I might be able to live in one of them, but actually I may be sublease it to someone else I trust. Would it be any legal problem to maintain 2 residence in the same area, any tax benefits?
Re: Invest in low /middle low income apartment - Posted by Randy (SD)
Posted by Randy (SD) on April 04, 2005 at 08:54:19:
Start with 2-4 units, reason being these are normally classified as residential for financing, over 4 units is commercial. I would not recommend using a property management company initially, you must learn how to manage your own properties first. I say this for two reasons, no one will care about your property or your cash flow like you will, secondly if you have no experience in property management yourself you’ll have no idea if you’re PM is doing a good job (suppose they tell you it cost $300 to fix a leaky faucet, would you know the difference?)