- My Forums
- Tiger Rant
- LSU Recruiting
- SEC Rant
- Saints Talk
- Pelicans Talk
- More Sports Board
- Fantasy Sports
- Golf Board
- Soccer Board
- O-T Lounge
- Tech Board
- Home/Garden Board
- Outdoor Board
- Health/Fitness Board
- Movie/TV Board
- Book Board
- Music Board
- Political Talk
- Money Talk
- Fark Board
- Gaming Board
- Travel Board
- Food/Drink Board
- Ticket Exchange
- TD Help Board
Customize My Forums- View All Forums
- Show Left Links
- Topic Sort Options
- Trending Topics
- Recent Topics
- Active Topics
Started By
Message
Turning a primary residence into a rental property.
Posted on 4/21/17 at 12:00 am
Posted on 4/21/17 at 12:00 am
I am planning to move out of my current house and purchase another house and want to turn the house I am currently in into a rental. What do I need to know as far as being properly insured once it changes into a rental and do I need to transfer the title to an LLC?
Thanks!
Thanks!
8
Posted on 4/21/17 at 12:50 am to TigerGrad2011
My best advice to you would be to transfer title to an LLC. It offers you the most protection and also the most tax benefits.
Posted on 4/21/17 at 1:09 am to Whodat28
How exactly do you go about doing this and how does it affect the mortgage?
Posted on 4/21/17 at 5:49 am to Whodat28
quote:putting it into an LLC doesn't really add any tax benefits
the most tax benefits
Posted on 4/21/17 at 6:12 am to drexyl
quote:
putting it into an LLC doesn't really add any tax benefits
Correct. Depreciation and taxable income are apples to apples. I would add an umbrella policy just to CYA. Mine is 34/mo for 2M per claim. I flip houses and mostly use licensed/bonded vendors, but in the chance I don't this just gives me added protection.
Posted on 4/21/17 at 6:27 am to TigerGrad2011
Been a while since I looked but there are some weird basis rules when you convert a personal residence into a rental. Check that and make sure you're depreciating the correct amount. Also remember you can't depreciate dirt.
Posted on 4/21/17 at 7:44 am to TigerGrad2011
quote:
What do I need to know as far as being properly insured
Call insurance and move the code from primary to rental residence. Insurance will go up as risk goes up. Encourage tenants to purchase tenant insurance. Remove all possessional items from your insurance to assure you are only covered for the house and land and nothing else. Be sure to assess if rentals are your thing. Selling later on has tax implications. A house which has been your primary home for two of the previous five years can be sold as a primary residence and taxes are lower for this than selling a rental outright. You could also roll equity in rental into another account, though, to purchase a new rental, though.
Posted on 4/21/17 at 8:01 am to TigerGrad2011
Check on homestead exemption status as well.
Posted on 4/21/17 at 8:31 am to TigerGrad2011
I did this same exact thing not long ago here in Fl. I did tell my insurance company I was no longer the primary occupant and my insurance went up a tiny bit, but worth the peace of mind should the Tennants do something that would require a claim and I wouldn't want that failure to disclose to negate the insurance.
I didn't file for a llc or anything like that.
When I did my taxes I claimed the proceeds, but as someone else mentioned after interest payments on the loan and depreciation of the asset I didn't take a hit at all on the income.
I didn't file for a llc or anything like that.
When I did my taxes I claimed the proceeds, but as someone else mentioned after interest payments on the loan and depreciation of the asset I didn't take a hit at all on the income.
Posted on 4/21/17 at 9:44 am to TigerGrad2011
If you have a mortgage, make sure the rate is good before making a rental. If it should be refinanced, do it before making it a rental.
Posted on 4/21/17 at 9:45 am to TigerGrad2011
As others have said, an LLC for one property is most likely not needed. I have a rental that was at one time my primary residence. The homeowners insurance does not cover contents of the property and I have an umbrella policy to cover any mishaps.
I'd also add that you may want to open a 'business' credit card for your rental property. Any expenditures you incur in relation to the property could be deducted on your taxes. (New AC, roof, paint, cleaning supplies, etc.) It helps me as I can pull a EOY statement and give that to my accountant, knowing that all of the expenditures on that card were tied to the rental.
I'd also add that you may want to open a 'business' credit card for your rental property. Any expenditures you incur in relation to the property could be deducted on your taxes. (New AC, roof, paint, cleaning supplies, etc.) It helps me as I can pull a EOY statement and give that to my accountant, knowing that all of the expenditures on that card were tied to the rental.
This post was edited on 4/21/17 at 9:46 am
Posted on 4/21/17 at 9:46 am to StringedInstruments
I've heard in some instances you can use the government bureaucracy to your favor. Two houses in different counties homesteaded at the same time (Alabama).
Posted on 4/21/17 at 10:18 am to auisssa
Do you have to have two houses to make that work?
I lost homestead on my rental and got back charged for it too. Was ignorance on my part as an accidental landlord.
I lost homestead on my rental and got back charged for it too. Was ignorance on my part as an accidental landlord.
Posted on 4/21/17 at 1:02 pm to StringedInstruments
1. Make sure the monthly margin is good enough.
2. Taxes will more than likely double due to the loss of homestead
3. My insurance actually went down. Same company, same specs, just a lower premium. You'll just have to call and check.
4. Make sure the depreciation table is set up correctly from the get go. Hire an accountant. You're paying depreciation recapture at sale whether you claimed it or not.
2. Taxes will more than likely double due to the loss of homestead
3. My insurance actually went down. Same company, same specs, just a lower premium. You'll just have to call and check.
4. Make sure the depreciation table is set up correctly from the get go. Hire an accountant. You're paying depreciation recapture at sale whether you claimed it or not.
Posted on 4/21/17 at 3:05 pm to rpg37
quote:
You could also roll equity in rental into another account, though, to purchase a new rental, though.
yea ?
Posted on 4/21/17 at 3:48 pm to Zilla
quote:yea.
quote:
You could also roll equity in rental into another account, though, to purchase a new rental, though.
yea ?
Posted on 4/21/17 at 7:15 pm to TigerGrad2011
I did the same thing recently.
Depreciation is appraised value of house (not land) divided by 27.5.
Depreciation is appraised value of house (not land) divided by 27.5.
Page 1 of 1
Popular
Back to top
Follow TigerDroppings for LSU Football News