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RE: is buying a CONDO/townhouse a good investment? (Follow-Up #3)

posted by: clemrick on 07.18.2006 at 09:04 pm in Buying and Selling Homes Forum

If you aren't going to live there, it isn't a "second home," it is an investment property. Your mortgage rate will be a little higher than for owner-occupied, but the interest, maintenance, depreciation, and fees will be tax deductable. See tax publications #527 and #946. You also might want to consult with a tax specialist at least the first year to make sure you have all the income and deductions in the right place.

As someone pointed out, you will also have look for townhome and condo associations that allow rentals. They are very common in Florida, but I don't know about CT.

As for finding good tenants, luck seems to be the biggest factor. Landlords who do complete credit checks and reference get burned from time to time. If you have enough cash flow, you might consider getting hiring a property manager to take care of everything, but filing taxes, for you.

NOTES:

Hi Razo,
I'm sending this because of the tax publication #'s on investment property and what we can legally deduct. Not sure if Paul mentioned all the above we can.
This guy, Dan said that as long as we occupy it for 2 weeks out of the year, we qualify for a 2nd home mortgage and that's all the bank looks at.
clipped on: 10.21.2009 at 06:09 pm    last updated on: 10.21.2009 at 06:11 pm