• Welcome to OGBoards 10.0, keep in mind that we will be making LOTS of changes to smooth out the experience here and make it as close as possible functionally to the old software, but feel free to drop suggestions or requests in the Tech Support subforum!

Buying a house while owning a rental property(ies)...

RaleighDeacon

RaleighDeacon

Well-known member
Joined
Mar 18, 2011
Messages
3,356
Reaction score
198
So most of you know RDToy and I moved to Charlotte last summer. We rented a house in Charlotte and it's perfectly fine. We are in no rush to move, but it looks like we are going to settle here and not move back to Raleigh/move elsewhere (although as soon as I put this in writing it will probably change...). With that in mind we are starting to think about buying a house here in Charlotte.

We have not contacted any real estate agents or mortgage brokers yet. Before I do that I thought I would come here for recommendations and advice.

First, RDToy still owns a townhome in Florida and I still own our house in Cary. Both properties are rented for more than the mortgage, so we are not losing money on either one. If we want to buy, in today's climate, am I going to have to unload at least one of those properties (or both) before we buy a house for ourselves here in Charlotte? If not, anybody got good brokers to speak to here in Charlotte?

We are interested in staying close to where we are now, or one of the other neighborhoods near us (NoDa, Midwood, First Ward, Elizabeth).

All knowing Pit, who should I talk to?
 
We bought a house (in May) while having one rented out, so it's definitely possible. I don't know about what difference it might make to have two. Don't have any recs in Charlotte, but it is for sure possible.
 
Can you clarify what you're asking? To state the obvious, there are no limits on the number of homes you can own, assuming you can afford them, so I'm not sure what your concern is when you ask if you have to unload one. Are you concerned about tax implications? Qualifying for the mortgage?
 
DeacinBama said:
Can you clarify what you're asking? To state the obvious, there are no limits on the number of homes you can own, assuming you can afford them, so I'm not sure what your concern is when you ask if you have to unload one. Are you concerned about tax implications? Qualifying for the mortgage?
Click to expand...

Tax implications and mortgage qualification. Mostly how will my pre-qualification be affected by us owning the other properties? If we have both rented for more than the current mortgage on them does the mortgage being paid on them not count against me, etc.?

Mostly, for the posters who are in Charlotte or know folks here, I am looking for recommendations on a good mortgage broker to talk to. We want to go ahead and get our ducks in a row so if/when we are really serious about buying, we're ready to proceed.
 
RaleighDeacon said:
Tax implications and mortgage qualification. Mostly how will my pre-qualification be affected by us owning the other properties? If we have both rented for more than the current mortgage on them does the mortgage being paid on them not count against me, etc.?

Mostly, for the posters who are in Charlotte or know folks here, I am looking for recommendations on a good mortgage broker to talk to. We want to go ahead and get our ducks in a row so if/when we are really serious about buying, we're ready to proceed.
Click to expand...

These guys:

http://www.lawnandmullinix.com/
 
If you're in the black on both rentals, then I don't see why you would have to unload either. It's good income for you guys.
 
RaleighDeacon said:
Tax implications and mortgage qualification. Mostly how will my pre-qualification be affected by us owning the other properties? If we have both rented for more than the current mortgage on them does the mortgage being paid on them not count against me, etc.?
Click to expand...

Regarding taxes, I don't believe mortgage interest from rental properties is tax deductible. It has to be interest from your "primary residence"' of which the federal government allows you to have two. So, if you have three homes, you are, at most, deducting interest on only two of them. And if you're renting out two, then you ought to only be deducting interest on the one you're occupying. Hopefully some tax expert can confirm or refute this, but that's my understanding.
 
HeavyPetter said:
I'd also be very careful about what elementary school your feeding into in those areas if you're ever planning to have kids. You might want to talk to Racer about that. My view on that area is: Eastover Elementary = Good, Everything Else = Risky at best.

http://www.cms.k12.nc.us/cmsdepartm...ts/2012-13 Elementary School Boundary Map.pdf
Click to expand...

i've always been under the impression that middle schools and high schools are more important to consider than elementary schools. when you're still in elem school, your success depends most on the support at home, not as much on the teachers. as long as the parents are willing to help supplement class time with some intensive work at home, you can overcome bad teaching at that age.

but then again, i went to selwyn elementary, not eastover, so i'm defensive about being told that my elem school didn't set me up for success :)
 
DeacHoops said:
i've always been under the impression that middle schools and high schools are more important to consider than elementary schools. when you're still in elem school, your success depends most on the support at home, not as much on the teachers. as long as the parents are willing to help supplement class time with some intensive work at home, you can overcome bad teaching at that age.

but then again, i went to selwyn elementary, not eastover, so i'm defensive about being told that my elem school didn't set me up for success :)
Click to expand...

I was just talking about the schools based on the area of town in which he's looking. A bunch of the schools in that area include some very rough neighborhoods and barely have operating PTA's, to the best of my knowledge.

Selwyn and Dilworth are both arguably better/more stable than Eastover since the last redistricting which stole a lot of students from Eastover and sent them to Dilworth. Selwyn's a great school.
 
RubbinsRacin said:
Myers park traditional ftmfw!!
Click to expand...

my great great aunt was the principal there for a really long time. as far as we know, her portrait is still in one of the hallways! it's also where my dad went to school. :)

and HP, my misunderstanding. definitely right on those neighborhoods for schools.
 
DeacinBama said:
Regarding taxes, I don't believe mortgage interest from rental properties is tax deductible. It has to be interest from your "primary residence"' of which the federal government allows you to have two. So, if you have three homes, you are, at most, deducting interest on only two of them. And if you're renting out two, then you ought to only be deducting interest on the one you're occupying. Hopefully some tax expert can confirm or refute this, but that's my understanding.
Click to expand...

My understanding is that a rental property operates like a business = with income (rent) and expenses (repairs, property taxes, maintenance, etc.) and that mortgage interest counts as one of the expenses. So when you calculate the contribution of the rental property to your own taxes, the net of all that is what counts. Of course you have to add depreciation to the expense side. Typically, if your rental property comes out as a net negative, you can't deduct it because it is a passive activity loss. The losses will accumulate year after year and then you can deduct the accumulated total of losses from any gain you have when you sell the property.

I don't know how long you can accumulate those losses or what happens if you don't sell the property for decades.

Of course, if it is a net gain you have to pay taxes on it every year.

Caveat - I am not a tax professional and these statements should not be relied upon.
 
You must log in or register to reply here.
Back
Top