Before I go pay for a lawyer, let's see what some TBN'rs (and CBN'rs) think.
I purchased two (2) seperate, 5 acre lots this year. They do not adjoin, but are in the same "subdivision". They were "owner finaced" meaning the developer holds the note. I hold title to each property with the developer as the lien holder.
I offered my in-laws the opportunity to purchase and place a mobile home on one of the lots. They currently live in a nice mobile home community. However, the lot rent continues to rise every year and is about to be raised to $300. I will not charge any property rental and will have a nice place to stay when I visit my tractor which already lives there.
Question: What is the most financially productive way to work this out for me? Do I charge rent (one dollar a month) and write off as a rental property? My father in law even suggested that he would "give" me the mobile home so that I could write the place off as a second home. Is it possible to be a co-owner of the mobile home while still being the sole owner of the property? Is there any advantage to that?
Does anyone have experience with re-financing of un-improved lots as that is one of my goals to lower my monthly costs. Can it be re-fied as a rental property? Or does the property have to be residential?
My goals are to:
1) Maximize the tax benefit from these properties.
2) Re-Finance to a lower rate.
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the lot rent continues to rise every year and is about to be raised to $300
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I don't have an answer to your question, but sure wish our lot rent was only that high; ours is $395 and will go to $410 after the first of the year. [img]/forums/images/icons/frown.gif[/img]
Yes, go see an CPA instead of a lawyer. they are more apt to be up on tax laws (and less $ also)! Good luck with the refinancing of the vacant land. Most lenders want something tangible to hold on to before they give up any money, something they can go claim and resell if something happens to the loan. Unless you have A-1 credit and / or have a relationship with a banker already, you might have to keep the owner financing. See if he will lower the rate for you, he might want 5% or 6% of something rather than 100% of nothing! Good luck!
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