Landlord Question and Answer Forum

Hi All, I've been learning LOTS in the past couple weeks about my introduction to being a landlord (reading NOLO books). I have a couple questions which I can't find answers to. Hoping this community can help. First, a description of my situation. [----] I have owned and lived in my LA condo, since 2003. I am moving to SF early next year (Feb/Mar). I have been in the adjustable period of a 5/1 ARM for the past year. My rate is 3.0% and expected to be 2.7% on Feb 1. Before I rent my place, I have many upgrades to make. I was planning on not starting them until January so that everything is in the same tax year. - remove popcorn cieling (positive for asbestos) - replace broken oven and old dishwasher - replace sagging garden fence - install missing bdrm closet door - possible bath overhaul (not sure yet if crack in tub is serious, or repairable) - replace 2" faux wood blinds with aluminum blinds - repaint all walls - steam clean carpet [-----] With that in mind, I am looking to refinance this month with a 30-year, while rates are low, and while I can still claim it as a primary residence. Then the tax part. As I understand it, as a homeowner I can not deduct the above upgrade list from my taxes, but as a landlord I can. I will be doing these upgrades while I still live in my condo and before I rent anything in SF. Can I still take these as tax deductions? Your help/advice/suggestions are greatly appreciated! Thanks

Yes, definitely refinance while you're still a homeowner. Also yes, you can deduct the repairs, along with almost any other expense you have associated with the property. Best of luck!

Posted by Gregory T, CA on Wednesday, December 8, 2010

I'm no expert but I don't think so. If you refinance as a home owner, you can write off points and application fees etc. But I am almost sure repairs are not tax deductable for a home owner. When you claim your property as an investment, you have to state when it became an investment, and must show income I believe. So based on my past experience with my CPA, you cannot claim repairs or upgrades until it is an investment property.

Posted by Gregory M, TX on Sunday, February 27, 2011