404: Rookie Reply: The Rental Property Expenses You CAN’T Afford to Miss

Real Estate Rookie

BiggerPockets

Business, Education, How To, Entrepreneurship, Investing

4.7 • 1.8K Ratings

🗓️ 10 May 2024

⏱️ 41 minutes

🔗️ Recording | iTunes | RSS

🧾️ Download transcript

Summary

How do you know if a rental property will make enough cash flow before you buy? Budgeting is KEY. When breaking down a deal, it’s critical that you account for the costs of all capital expenditures (CapEx), maintenance, and repairs. Overlooking an important line item could easily put you in the red! Welcome back to another Rookie Reply! In today’s episode, we’re going to show you how to budget for the everyday operating costs that come with owning rental properties, as well as how to set minimum cash flow requirements when analyzing a rental. Should you find a partner for your next house hack? We get into the potential advantages and disadvantages of joining forces with other investors. We also talk about the many tax benefits in real estate and whether you need a limited liability company (LLC) to maximize them! If you want Ashley and Tony to answer a real estate question, you can submit a question here, post in the Real Estate Rookie Facebook Group, or call us at the Rookie Request Line (1-888-5-ROOKIE). In This Episode We Cover How to budget for everyday rental expenses, maintenance, and repairs How to set minimum cash flow requirements when analyzing deals The pros and cons of forming a real estate investing partnership for a house hack How to distinguish capital expenditures from repairs and maintenance Whether you NEED an LLC to reap all of the tax benefits of real estate investing And So Much More! (00:00) Intro (00:31) Claiming Tax Write-Offs (04:02) Budgeting for Property Expenses (15:45) Partnering on a House Hack? (23:42) CapEx vs. Repairs & Maintenance (26:37) How Much Cash Flow Do You Need? (32:37) Send Us Your Question! Check out more resources from this show on BiggerPockets.com and https://www.biggerpockets.com/blog/rookie-404 Interested in learning more about today’s sponsors or becoming a BiggerPockets partner yourself? Email: advertise@biggerpockets.com Learn more about your ad choices. Visit megaphone.fm/adchoices

Transcript

Click on a timestamp to play from that location

0:00.0	This is Real State Rookie episode 104.
0:04.3	My name is Ashley Kerr, and I'm here with Tony J Robinson.
0:07.9	Welcome to the Real State Rookie podcast, where every week, three times a week,
0:11.6	we bring you the inspiration, motivation, and stories
0:14.2	need to hear to kick start your investing journey.
0:16.5	And today we've got, as always, a lot of great questions for you.
0:19.2	We're going to talk about how to classify CapX versus repairs and maintenance.
0:23.0	We're going to talk about casual requirements.
0:24.9	What's a good deal versus what's not?
0:26.4	But at first, we're going to be talking about everyone's favorite phrase,
0:30.1	tax write-offs.
0:31.6	So our first question up comes from Stephanie Farber and
0:34.6	Stephanie says, are write-offs different for homes in an LLC versus homes in my
0:40.9	primary name? This is a million- dollar question, probably one that I think is a big
0:47.2	misconception amongst new real estate investors. And I would encourage you guys to go back
0:53.1	and just search for any episode we've done with Amanda Hahn.
0:56.8	She's an amazing real estate CPA
0:59.8	written a bunch of books for her and her husband,
1:02.4	Matt McFarland. I've written a bunch of books for Her and her husband Matt McFarland have written a bunch of books for bigger pockets so they can really give you the inside scoop.
1:08.0	But here's the thing. Your LLC is not necessarily for tax purposes, your LLC is for liability protection.
1:18.0	So you can still claim deductions and business expenses through a property even if it's in your personal name.
1:27.0	So the title doesn't necessarily matter for your ability to write things off.
	...

Please login to see the full transcript.

Previous episode | Next episode

Disclaimer: The podcast and artwork embedded on this page are from BiggerPockets, and are the property of its owner and not affiliated with or endorsed by Tapesearch.

Generated transcripts are the property of BiggerPockets and are distributed freely under the Fair Use doctrine. Transcripts generated by Tapesearch are not guaranteed to be accurate.