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General Investment Property Rules


               
2011 Oct 24, 2:45pm   1,174 views  2 comments

by BayArea   follow (1)  

Hi folks,

I'm hoping you guys could share some light on the topic of 2nd home (investment property). What should I be aware of that may differ from the first loan I received through WF? This would be a single family home.

Do banks still typically give you 80% LTV without any additional rate hikes or penalties (assuming excellent credit)?

Any differences with fees or property tax? Is the interest on the loan still tax deductible?

Thanks in advance for any guidance!

BayArea

#investing

Comments 1 - 2 of 2        Search these comments

1   corntrollio   2011 Oct 25, 4:11am  

ptiemann says

- repairs (not deductible for your personal home)

Note that you need to distinguish between maintenance and improvements. You replace a broken window -- deductible in the year of the repair. You build a gazebo with jacuzzi -- depreciate over time.

Yes, there's a big difference between capital improvements, and simple fixes. If you remodel your kitchen, it's probably a capital improvement.

All the other stuff I'd agree with, although ptiemann didn't mention depreciation.

There are limits on deductibility of certain things if you make too much money under the passive activity rules and are not a "real estate professional" (defined by the IRS -- you have to qualify under their definition).

2   BayArea   2012 Jan 2, 6:29am  

ptiemann and corntrolliio, great summary and thank you for the reply.

Here is a question... What if your rental deductions exceed your rental income?

Also, what can be said about depreciation and what is the annual depreciation limit? A list of items that can be depreciated would be helpful.

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