r/RentalInvesting

Hello ! I am set to inherit a house from a family member and I would owe nothing on the mortgage or anything outside of utilities and internet. The house is estimated to be worth about 450k right now. I am 168k in debt. With the current market, I don't know if I should rent half the house and live in the other half (3b,2b) or if I should sell the house to instantly pay off my student loans. The renter would have 2 of the 3 bedrooms and a bathroom in their section. There is currently no kitchen in their section but I would be making one for them.

Rent for 2b1b in my area goes for about 2,000 to 2,600, if that helps at all. I want to charge on the lower end because 2,600 is absurd.

The goal is to do DSCR loan and buy in some landlord friendly state with atleast 1.5x LTV

What potential states/areas should one look for. Currently own in Sac, CA

To make the long story short about why I’m in this position, basically we bought a home we thought we would be living in for at least 10 years if not longer based on my wife’s job out of training(mistake not to rent first and make sure the job was solid). The partners at that job ended up being selfish pricks who wouldn’t renegotiate in good faith after a contract issue they caused. Blessings in disguise, wife’s new job is significantly more financially lucrative in a more desirable area (over 3 hrs away).

We moved and have been renting for a year, financially we are in a good place and it isn’t a problem to pay our mortgage and rent. However we want more space to start our lives and that is where we would be strained to pay a mortgage on two homes. Initially we thought the first home we bought could be a vacation home since it is in a more seasonal touristy area, but homes in the area we would like to buy in now are much more expensive than we expected and so we need to unload the first house we bought before we buy another.

Now the issue is that in the 3 years we owned our first home it hasn’t appreciated at all. We bought when the market was much hotter and now things have significantly cooled. I think we would be lucky to sell at what we purchased the home for. We didn’t have to put anything down so we don’t have much equity and will need to pay out of pocket for closing cost (we were eligible for a loan product that doesn’t require PMI w/ 0 down). So if we sold at the same price we bought we would pay roughly 16k in closing costs out of pocket.

Alternatively we could rent from for less than our mortgage by 1k a month but even that might be pushing it. Obviously this doesn’t account for maintenance and any gaps in occupancy.

Intuitively I think it makes sense to cut our losses now, but I am having trouble articulating why to my wife who thinks we should rent it. Her thought process is that 3 quarters of the 1k we pay out of pocket goes towards the principal or our mortgage and that overtime it will eventually all go towards principal and therefore not really a loss. And also that eventually the home will appreciate in value enough for us to profit when selling.

I guess my intuition is a known 16k-20k loss now is better than covering the 1k gap plus maintenance cost over the next decade, just in hopes that it will eventually appreciate enough so that we would make a profit (likely just a modest profit). I’m sure there is also the time value of money that isn’t being accounted for properly.

What would you do in this situation, and if you can explain your thought processes I would appreciate that.

Have a waterfront STR in central fl that I’m having trouble getting booked via vrbo and furnishedfinder. I read that many people have success through Airbnb but personally I never use them. Considering signing up with Evolve, but maybe I should try Airbnb first?

I’ve been doing research all day and at this point my head might float away lol (yes, I will be contacting a CPA this week but wanted to get an idea of how it worked.)

Bought home in FL 2022. $393k
Didn’t know about the 2 outta 5 rule - and we moved to AZ about 1.5 years later. Had renters move in and they’ve been there for 2 years. They leave at the end of this month.

The value of the house per market is $365k so it’s gone down considerably.
We figure the house has depreciated about $21k in the last 2 years.

I realize we’ll have to pay some type of depreciation tax, but because we’re taking a loss on the sale, my understanding is it won’t be much.

The question is - how does the capital gains work?
We didn’t plan on taking the money and putting it into an investment property so a 1031 doesn’t make sense for us.

But I’d like to get an idea of what I need to do that is the smartest way to protect myself from additional taxes because we didn’t follow the two out of five rule.

Any insight helps because then I have a better idea of what I’m discussing with CPAs and realtors this week.

With all the uncertainty of future. Is it ideal to park the capital into a residential property which will be delivered in following years. Or is it wise to buy into already constructed units. Even though India has demonstrated great capability in crisis this is a new one and it will affect constructed cost to rise up. I believe as demand for production rises. What's your thoughts?.

My husband purchased a home in 2009, I moved in 2012, we got married in 2014 and I started contributing half the mortgage. My name is not on the house. In 2022 we purchased a house together and turned the previous residence into a rental property. My husband is refusing to put my name on the rental house. I’m uncomfortable contributing more money to repairs, mortgage, rental fees etc. until he does add my name.

Do I have any claim to my investment thus far?

Location: Oklahoma