Credit Help Forums

sbarber77 · #1 08-04-2006, 07:38 AM

My husband and I are possibly going to buy a new house and keep the one we have now as a rental property. Since we still have a mortgage left on our current home my FIL suggested that we remortgage and put the money into our new home since we can write off the intereston our current home if we are using it as a rental property. That is something I would not have thought of but it makes so much sense.

taiarain · #2 08-04-2006, 07:49 AM

How much equity do you have in your existing place? Is it anywhere near paid off?

Taia

Lyricb · #3 08-05-2006, 07:23 AM

Things get tricky when you turn a home into a rental property, though. Just be sure they aren't going to charge you a higher interest rate or put you on some sort of balloon payment.

sbarber77 · #4 08-05-2006, 06:47 PM

We will have to be careful. We have not actully discussed any of this at the bank yet but we don't know for sure that we are moving.

We will definitely be careful as not all banks always act in your favor.

r8rpwr · #5 08-11-2006, 09:31 PM

You can write off the interest anyway, whether it is your home or a rental.

I own several rental properties, so I know a lot about this. I'm happy to answer any questions.

One thing, you want to make sure you want to own rental property. It's not for everyone. Do you really want to be a landlord or do you just want to make money from your house? If you don't have the genuine desire to be in the business and have the thick skin and dedication to do justice to it, it is probably not a good idea.

If you do, though, more power to you.

Plumley · #6 08-23-2006, 06:32 PM

One of the best investments I ever made was in an accountant. You might want to talk with a financial consultant, independent of the bank, about your options.

ferby03 · #7 08-26-2006, 02:23 AM

Quote:

Originally Posted by r8rpwr

You can write off the interest anyway, whether it is your home or a rental.

I checked on this last year when I did taxes, because my BIL had a rental property. You can't take off the interest unless it is your place of residence. How are you doing it?

Avian · #8 09-03-2006, 02:37 PM

If you are serious about becoming a landlord, you should probably look into getting an accountant to consult with about some of your business decisions anyway.

r8rpwr · #9 09-09-2006, 07:04 PM

Quote:

I checked on this last year when I did taxes, because my BIL had a rental property. You can't take off the interest unless it is your place of residence. How are you doing it?

How did you "check" on this? What you are saying is not true; interest on an investment property is most certainly deductible.

Not sure what you mean by "how" am I doing it; it's reported on Schedule E along with all other rental income and expenses if that's what you're asking.

muslgrl · #10 09-10-2006, 02:39 AM

But you can claim depreciation I believe on rental property