If you do decide to sell it, make the loan from your parent official. It doesn't take much more than a printed sheet of paper with signatures on it and terms of the loan. Just make sure the terms are 0% so the IRS doesn't get squirrelly when 500k shows up in your folks bank account. You have a super sweet deal w/ a 0% interest loan, especially if you have such a minimal (or deferred) payment. You might not rake in tons of $ renting it but you also might spend a lot more to buy the same type of unit 2 yrs from now. You should definitely talk it over with your parent though and get their input as they are stakeholders in this property.
With the help of my parents I bought a condo in NYC several years ago. their unofficial loan to me; we bought it with cash).
I'm now going to go to business school for two years in Chicago so I'm wondering what to do with this property. My options are:
my parents (i just pay them a nominal $1k fee monthly) and it's essentially an interest free loan. I don't take any mortgage/tax deductions and I'm not sure how they treat taxes on their end, but I essentially just treat the $1k as rent.
Thanks very much for bringing up the depreciation aspect that's how clueless I am on the subject (any beginner guides to read up on this?). I read a bit on this subject and this is my understanding could you please opine if this is incorrect.
If you think you will return to NYC keep in mind there are costs in buying and selling so you would have both costs of selling this now and buying something new later so even if it is break even or small margin it might be worth it if you think you will return. (in addition to the hassles of negotiating a sale, showing , etc). It would be different if you were making a permanent move.
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Yes, thanks for all the replies. I will definitely talk it over with my parents. Air Max Thea Triple Black
I really lucked out in that we bought a condo rather than a co op since now I'm realizing how much more headache a co op is to rent out. Thankfully our condo is relatively straightforward process to rent out units. I grew up playing violin and while I still prefer the mendelssohn and tchaikovsky violin concertos above everything else, I may start dabbling into new genres I ever get some free time. (assuming I don't spend it all learning how to become a landlord yikes)
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From a cash flow perspective, is the following correct?
I assume you've already checked with your HOA and you are indeed allowed to use the unit as a rental?
Becoming a landlord during grad school
What is your parents position on their payments? Do you have reserves for the items that may need repair when you are gone?
As far as the taxes, once the property is rented out it is eligible for depreciation. On a $300k property I depreciate about $10k a year which comes out of the rental income. If you are only making a small profit after mortgage and HOA I would assume you would not be taxed on the income. One thing though, is this loan from your parents "official" because you will need a 1099 to deduct the interest from the rental incomeThank you guys for responding. If I lived in Chicago now, I would not be thinking of buying an investment property in NYC. I didn't expect to leave NYC when I bought this condo for a while but plans change.
My condo is worth about $600k. Land is 20% which means the building is worth $480k. Depreciating that over 27.5 years means the annual depreciation is $17.5k and the monthly amount is $1,450.
Remember that positive income is a good thing :) If you make money on the rent, make sure you hold some of it back for tax time. As a grad student you shouldn't be paying much, if anything, in taxes.
luxury condo and I have a doorman and super, so hopefully the smaller repairs can be handled directly by the super so I won't have to deal with tenant issues all the time.
I don't actually have an official mortgage to Nike Air Max Thea Fashion
Given the depreciation deduction I may just end up renting it correct me if I'm wrong but it's a decent mid Nike Air Max Thea Women Tumblr
So my question is, how much of a hassle is 2 going to be? If I'm in Nike Air Max Tavas Khaki Womens grad school, with no income and a temporary residence, am I going to pay "income tax" by becoming a landlord in NYC? After paying real estate taxes, the condo fee, there's not much left over from rent, and if i have to pay income taxes on rental income then that may be close to zero/negative cash flow. If there's some possible deduction I can take for being a poor student that would help.
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