Recommend Tax and Real Estate Professionals - but try to keep a friend local.

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I highly recommend having a tax professional, a property manager, and keeping a trusted friend close.

 

I bought in 2005 after expecting to be there on 4 year orders... moved 2 years later and have been renting ever since, from a distance.

 

Your home is a big investment, and these expenses are well worth it when it comes to protecting it.

 

Real Estate Professional:

 

They should vet all of your tenants, show your property, get people in/out when repairs are needed, etc.  Trying to do this from a distance is too difficult.  All this for a modest cut.  Mine takes 20% 1st month of tenant and 10% every month thereafter.

 

A sub-tip: Get a list of trusted service providers (HVAC, Plumbing, Handyman, etc), possibly 1-2 each.  This way, when AC goes, Property Manager has a list of people to call that you've vetted already.  She can then start right away on getting estimates.  She can also handle this while you're away/deployed/etc if she has a good list to work off of.

 

Tax Professional:  

I got a lady that does my taxes: Federal, State where my house is, State where I'm at now, all for about $250-300/year.

 

There's a lot of intricacies to doing taxes, especially with multiple states and rental property.  Even if you buy the leading tax prep program, you'll need to supplement it with multiple states.  Now you're up to ~$75-100 in costs doing taxes yourself, and you're still doing it yourself for several hours.

 

A tax professional can help you with rental decuctions, depreciation, tax planning for sale of house (For example: Homeowner's Exclusion for capital gains, like kind sales, etc.) 

 

Finally, part of this tax prep expense is even deductable as a business expense.

 

Some major tax pointers that you can look into:

 

Homeowner's exclusion:  IRS allows you a large deduction for capital gains (provided you have any) but only if you meet certain requirements.  Basically, if you rent it more than 3 years... you may be giving up this deduction.  Gets even more complicated if you move back in after renting it for a period.

 

Depreciation:  Not only the cost basis of your home (Not Land) can be depreciated, but any other capital improvement that you are not able to deduct.  Yet, this affects your basis, which needs to be tracked for tax purposes on your sale.

 

Try to keep a local friend:

 

A Neighbor or Civilian Co-Worker that will be there a while should do.

 

I use this person from time to time to do an actual inspection.  Yes, I trust my property manager. Yes, she sends me photo's.  But, If I can't make it myself to the property, I appreciate having someone without an interest in the property to take a look at the property once in a while.  Check out the carpet--- does it REALLY need to be replaced?  Light Switch Bad?  A friend can swap it out quickly and MUCH cheaper than an electrician would charge.

 

In conclusion:

No, its not always fun being an owner from a distance, but hopefully these tips help make it easier for you while you wait for the right time to divest yourself of this investment. 

 

Good Luck!

1 REPLY

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John O,

WOW! Thank you for sharing such helpful and insightful tips! I love your idea to have a list of trusted service providers!

 

Thanks again for posting in the community!