"John~ " wrote
Most anything works IF, and I repeat IF, you just keep up with it. Keep those receipts. Make entries weekly or monthly, or just when the transaction takes place.
That's what screws most people up is not doing it as they go along, and then there's a mountain of paper to decipher and enter.
At least, that has been my experience.
Steve
Thanks for the reply.
Not necessarily. There are financial situations where it is better for someone(s) to rent instead of buy a house, and take the difference between what they'd pay on a mortgage and what they're paying in rent and plow it into an investment with a higher return than real estate.
Yes, you miss out on the tax deductions you receive as a homeowner, but apparently there is a way to ameliorate that loss in other ways.
I'm not entirely sure how it works, but I do know a financial adviser I knew (and trusted) 15 years ago wanted me to go this route, but I moved so it became a moot point.
I just have one account for multiple properties - just note on the journal which is for what. I have even purchased common things like office supplies, repair material, landscape goods, etc. and don't even note which is for what but just divided it equally amongst the properties. Done this for many years, no headaches and no complains from the IRS so far.
The headaches comes from doing what if games on the spreadsheet as to put what expenses where and on which forms to achieve the minimum tax payment on the afternoon of April 15. But I have so much deprecation now that no matter how I do the returns, I still pay no tax. Actually, I rather pay huge taxes and have a huge cash flow.
This situation applies in places like the Bay Area where you have over priced houses and low rent relative to the value of the houses. Assume the landlord just purchased a rental and if you look at his cash outflow he is actually paying you to rent out his property! In other words, its better to be a renter rather than a landlord until the next real estate cycle where at some point you need to buy.
There is renters' credit in California and if you have a home business that portion used in the rental could be written off in the tax return.
I heard of people with over a thousand investment properties in and outside of the US. But they must have help or professionally managed. It's a full time job just to manage the property managers.
I'll try not to get that big.
Check out "
thanks for the reply. I had the "rent right" demo. Then I bought the $99 quicken rental property manager on ebay for $26. I seems like it will do more than we'll need.
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