Commercial Rental Property

To further protect your online security, active links from Q&A has been disabled!

I don't have any other income, and I don't expect my income to get much higher than that.

Best Answer

You're safe until you top $30,000 (gross) in any rolling four quarters. If you have a lot of set-up costs though, you might want to register so that you can get the GST that you paid out back. If you don't register, that GST just becomes like any other expense.

I own a commercial office suite, which I rent. Are expenses such as Mortgage interest, Taxes, Insurance, Repairs, deductable in my personal return, as they would be in the case of a Residential Rental Property? I can't find reference to decuting expenses for a COMMERCIAL rental property in personal income, anywhere in the IRS website.

Best Answer

Last year I did not increase the commercial tenants rent by the percentage stated on the lease. Can I use last years rental increase percentage (7%) and this years increase percentage(also 7%) to increase the tenants rent or does last years "banked" amount no longer count?

Best Answer

I deal with mostly residential leases, but I would say that whether you can do it or not depends on how you have your lease written. If you have it in your lease that there was to be an increase then you have a leg to stand on. If you have it written in a way that states you could raise the rent then you don't have anything banked. You could, and didn't. To fully compare I would look at other legal contracts. Take a rental car agreement. If you rent a car and it states you can drive 300 miles and you only drive 50 you do not get a refund for unused miles. You could have done something but didn't. The same thing held true in this lease. You could have raised the rent but didn't. If it states that you could raise the rent 7% per year then you cannot raise it 14% this year.

Say the property was $200,000. And through an LLC can I finance the $200,000 as a new LLC without any company credit or assets. Say that they want %10 down also. Could I personally garauntee the $20,000 myself and lend that to the LLC. So then the LLC can make the down payment. So if i did it that way could I then finance the other 90% with the LLC. Cause I was always under the immpression that commercial rental properties are not valued like a home. That the loan is based on the actual property itself(the value of the building). So the loan amount wasn't based on assets that the LLC already had, but that it could be based on what the building was worth. Please help. thankyou closing fees and transaction fees realy has nothing to do with it. You can get the seller to pay or you can finance them in with the building. thanks though

Best Answer

There are a couple of things you an do to acquire this property. None of which is without coming up with a down payment and you have to have cash, unless the current owner is gonna take back the financing themselves. Most lenders want to see a down payment of 20% or more for any entity to purchase a commercial property. If the LLC has no credit history or money in the bank chances are you will have to personnally guarantee the loan yourself (Called a Re-course loan). Even if you placed any funds in the bank account of the LLC it has no banking history or what is known as seasoned funds. The LLC also has no history of earning any money, so it can not prove how it can repay the loan,under any circumstances. We are now at financing the loan. With your 20% down and you placing the property in the LLC's name you would have to guarantee the loan personally for the other 80%. You may use the LLC's checks to repay the loan, thus giving it some history. What is your reasoning for wanting to do this property this way? Are you attempting to establish credit for the LLC? If so there are other ways of accomplishing this. Building corporate credit is like building personal credit, it takes time and baby steps. Who do you know will lend a 18 year old high school graduate $200,000 with no credit history, no job, or means of paying back the loan? The same applies to a corporation. I hope this has been of some use to you, good luck. "FIGHT ON"

I bought a building in the downtown area I live in the upper section. The downstairs was rented to a business when I bought the building but the business has since been sold and the new owner wanted to stay. We do not have a lease and are just going on a month to month basis. (Couldn't get her to sign a lease.) She consistently pays the rent late and I am forced to call her at least once a month to ask for the rent. One month she told me she wasn't going to pay because she didn't have it. I told her I was making arrangements to evict her she changed her tune and said she would get caught up. She did but every month since then she pays so late that it is almost time for the next payment. I need this money to make the mortgage every month and so frustrated because twice I have had to take money out of my savings just to pay the mortgage on time. I am getting worried because she is late again this month. What are my rights here? Can I evict her? How much notice do I have to give her? I live in ohio littlelanasue, Good one! I would like to try it but would like to know ..have you ever been sued for this? This person is NOT easy to get along with.

Best Answer

I'm not sure what the laws are in your state, but I own commercial real estate myself. This is what I do. If I do not have a lease signed, and the rent is not paid by the 10th of the month, I change the locks on the doors. When they pay me the rent that is owed, plus the cost of changing the locks, they can get in. If they don't like it, let them sue you! But, it will take at least 30 days for them to get you into court, and in the mean time....they are out of business!! Nothing is in writing! A few times of their door being locked, and they WILL pay. They pay you late, because they can. Let them see that they CAN'T!