Investment Buy?
Time to tap this knowledge pool… Since we have decided to rent in Brownstone Brooklyn (couldn’t afford to buy the space that we need) we still have our “house fund” sitting in the bank. This past tax season has proven that 3 kids just don’t provide enough deductions so we are thinking of buying something…
Time to tap this knowledge pool…
Since we have decided to rent in Brownstone Brooklyn (couldn’t afford to buy the space that we need) we still have our “house fund” sitting in the bank. This past tax season has proven that 3 kids just don’t provide enough deductions so we are thinking of buying something to rent out.
My questions are many, including:
– is this a good idea at all?
– with a budget of no more than 325K, where should we be looking?
– should we bother looking at studios or are 1BRs that much better of an investment?
– Anyone want to sell their place but still want to live there? (hey, you never know!)
Many thanks in advance for your 2 cents.
to answer the original question – i saw a proper prewar 2 bedrm in kensington. you have a lot of kids, and your budget is tiny. you could perhaps find a duplex condo with lower floor space at a discount in east williamsburg.
also try ridgewood.
Thanks so much for everyone’s input! You have given us great bits to think about (btw…the $325K is the budget of a purchase price).
And what happens if you can’t take the “losses” because your income is too high is that they accumulate and you take them when you sell the property.
get away from w2 income and things get better.
You do get a tax writeoff with an investment property.
With the non-cash depreciation expense added in, there will likely be an accounting loss. As long as you make under $150,000 of regular income you can write off all of that or part of that loss (it begins to scale down if you make somewhere like $75k I think)
There are no “decuctions” with an investment property. ALL expenses are legitimately written off against income. mopar and oe are wrong on these 2 points.
Consult an accountant
Dave your Garden is a good deal!
I would not buy property as a tax-savings vehicle. First of all, one thing Obama and the Republicans seem to agree on is phasing out various deductions. Secondly, if in the future your income grows, even under current tax law, deductions start to phase out. And when you deduct costs of a rental property, depending on your income and your role in the property, you may well not be able to offset any “losses” against regular income, which limits your tax savings further. If you want tax-free income, consider NY state bonds, or even 529 plans for your kids.
Just wait. Or buy in a cheaper neighborhood, such as Sunset Park, Clinton Hill, Bed Stuy, Jackson Heights, etc.
You don’t get a tax write-off with an investment property.
Also, do you mean you have saved $325,000 or do you mean $325,000 is the price of the home you could afford?
“- Anyone want to sell their place but still want to live there? (hey, you never know!)”
When you say your budget is $325k, is that the amount you’d be putting down. I’d be asking $850k for mine and with $325 down, that’s a mortgage of $525k and on a 5.2% mortgage rate that’s $2,800 a month ( taxes are $2,100 a year additional). I’d pay you $2,400 for my duplex and the garden level is at $1,150 now.
Obviosly if I let it go for less than $850k thse number would be lower.
It works.
DJL135e54@yahoo.com
Your biggest risk in all of this is tenants who can’t or won’t pay the rent.