StaceyinLA Posted August 3, 2014 Share Posted August 3, 2014 If so, what are the tax implications? Are there any write-offs? We are remotely considering purchasing a small home that we would then rent to dd and her husband when he gets out of the military next year. I think they are concerned about qualifying for a mortgage, though I'm not sure it'll be an issue (obviously they would attempt that first). I'm just wondering if there would be any financial benefits for us. They would only be paying the amount of the payment. At some point, we would do a lease-purchase for them to buy it from us, or we'd sell it and let them use any profits to put down on another place. This is all just talk right now, but I'm curious. Quote Link to comment Share on other sites More sharing options...
TranquilMind Posted August 3, 2014 Share Posted August 3, 2014 If so, what are the tax implications? Are there any write-offs? We are remotely considering purchasing a small home that we would then rent to dd and her husband when he gets out of the military next year. I think they are concerned about qualifying for a mortgage, though I'm not sure it'll be an issue (obviously they would attempt that first). I'm just wondering if there would be any financial benefits for us. They would only be paying the amount of the payment. At some point, we would do a lease-purchase for them to buy it from us, or we'd sell it and let them use any profits to put down on another place. This is all just talk right now, but I'm curious. Yes, you can write off all of your business costs. There are some additional rules if you are entangled with family in a business arrangement, wherein your rental amount must be market value, etc. You need a cushion above and beyond just your mortgage payment, for maintenance and repair costs. There will be costs every year for repairs, HVAC maintenance, plumbing issues, upgrades, etc. You can trust your daughter and her husband to do it, but if they don't, or don't have the experience to recognize problems, it devalues your asset. Most Lease-purchases do not work out, especially with family. I never, ever rent to family or friends, nor do most professional landlords (I realize you are Mom and Dad, but just saying). I would rather give them some money and let them buy a house, than rent to them, and have to worry about how they maintain my asset. Quote Link to comment Share on other sites More sharing options...
idnib Posted August 3, 2014 Share Posted August 3, 2014 If so, what are the tax implications? Are there any write-offs? We are remotely considering purchasing a small home that we would then rent to dd and her husband when he gets out of the military next year. I think they are concerned about qualifying for a mortgage, though I'm not sure it'll be an issue (obviously they would attempt that first). I'm just wondering if there would be any financial benefits for us. They would only be paying the amount of the payment. At some point, we would do a lease-purchase for them to buy it from us, or we'd sell it and let them use any profits to put down on another place. This is all just talk right now, but I'm curious. Yes, there are write-offs. But we don't take the write-offs against our own taxes owed, if that makes sense. We keep the rental as separate and we benefit from it, but the amount of income and the amount of taxes we pay stay the same as they would have otherwise. The property benefits, not us personally. I'm not familiar with renting to family so I can't help you there. Quote Link to comment Share on other sites More sharing options...
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