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Colorado HomeFinder | Denver Real Estate, Search Denver Homes for Sale in the MLS Call 800.231.9153 | Contact Us If you already have an account, sign in here Denver Colorado Real Estate - find out first about the newest Denver real estate listings! You learn about Denver homes for sale the day they hit the market - before other buyers. Automated HomeAlert emails you new listings that fit your personal home search criteria and gives you access to all the Denver Colorado real estate listings. It's easy - Just submit your email address and home search criteria. Your email is not shared or sold to anyone. You incur no obligation or cost for this free Denver real estate service. Our Privacy Policy: We respect your privacy. All information provided is strictly confidential and you can unsubscribe at any time. Colorado HomeFinder will never sell or share your information with any outside parties. Click here to review our Privacy Policy . 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Arvada Aurora Berthoud Boulder Broomfield Castle Rock Denver Englewood Erie Estes Park Evans Evergreen Firestone Fort Collins Fort Lupton Fort Morgan Frederick Golden Highlands Ranch Johnstown Lakewood Lafayette Littleton Longmont Louisville Loveland Lyons Nederland Niwot Parker Severance Superior Thornton Wellington Westminster Windsor Please select if necessary Arvada Aurora Berthoud Boulder Broomfield Castle Rock Denver Englewood Erie Estes Park Evans Evergreen Firestone Fort Collins Fort Lupton Fort Morgan Frederick Golden Highlands Ranch Johnstown Lakewood Lafayette Littleton Longmont Louisville Loveland Lyons Nederland Niwot Parker Severance Superior Thornton Wellington Westminster Windsor Please select if necessary Arvada Aurora Berthoud Boulder Broomfield Castle Rock Denver Englewood Erie Estes Park Evans Evergreen Firestone Fort Collins Fort Lupton Fort Morgan Frederick Golden Highlands Ranch Johnstown Lakewood Lafayette Littleton Longmont Louisville Loveland Lyons Nederland Niwot Parker Severance Superior Thornton Wellington Westminster Windsor Contact Information Name: * First Name: Last Name: E-mail: * (Valid email address is required to receive listings) Re-enter E-mail: * Phone Contact: * Home Phone: Work Phone: Information that will help us serve you better Your level of Interest: * I have a HIGH interest in buying a home and am ready to start visiting homes now. 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Selling Home

Home Not Selling - Home & Garden - Why is my house not selling? @ FemaleFirst Home & Garden Navigation › Home › Home & Garden Home City Guides › Edinburgh › Leeds › Liverpool › Manchester › Newcastle › Sheffield Moving House › Mortgage › Moving day tips › House Pricing House Products › Cookers › Telephones › Fridges › Freezers › Furniture › Kitchen Products › Television sets › Vacuum cleaners › Washing Mach. Tell A Friend › Tell A Friend Archive › Earlier Stories Why is my home not selling? If your house has been on the market for a number of months, you may well have to consider lowering your asking price. Maybe you over priced, or it may be that the market conditions quickly changed. Be a Female smart mover! Click here to get the mortgage that's best for you. Whatever the reason for the lack of interested buyers, you are faced with three options. Sit it out Buyers tend to get more and more wary of properties that have been on the market for a some time and the longer it stays unsold, the worse this effect is going to become. Sometimes it pays to be patient but if you are in a hurry to sell you should lower the price. Or if you have been trying to sell it on your own it might be time to get the professionals in. Lower the price Most people lower the price of their property if it hasn`t been on the market for a while. If you are going to lower the price, make sure that you do it so that prospective buyers can see the difference, but don`t lower to the point where you are leaving yourself short. Talk to your agent and get their opinion on what price you should lower it too. Take it off the market If you are selling out of choice rather than necessity, it can be worth thinking about taking your home off the market for a few months. Waiting until the broader market conditions can help make sure that you get the price you are looking for, but only if your property is valued correctly in the first place. If you are simply asking more than the property is worth, you are going to have trouble finding a buyer whatever the market conditions. You need to assess why your property is not selling. Is there a fall in the market? are you living in a run down area? is your asking price to high? or is there damage to the house? Talk with your agent and go through the possible reasons for the property not selling. You could try changing your agent or signing up with more than one. Allowing other agents to try and sell the property will broaden the number of potential buyers that are reached with your property details. Chat with other members | Structure | Lingerie | Womens Chat | Advertise | Terms & Conditions | About Us | Contact Us ShoppingFirst.co.uk | MaleFirst.co.uk | CoolBriefs.com | TeenFirst Server: web2.femalefirst.co.uk © 2005 Femalefirst Division of Play-2-Win Ltd all rights reserved

Real Estate Loan

Refinance Your California Mortgage Loan Looking to refinance a California Mortgage Loan? You've come to the right place - Apply Online or Call Us Today at 1-888-835-0761 Apply Online Now Or Call Us Today 1-888-835-0761 Refinance Home Purchases Debt Consolidation Loan Home Equity Loan Bad Credit Mortgage Mortgage Calculator Privacy Policy "Take Command Of Your Home Financing..." Call Us Today Or Fill OutOur Online Application To Get Started CALL TOLL FREE! 1-888-835-0761 Do You Really Need 4 Mortgage Offers - or Just The Best Offer? We don't sell your information to multiple brokerages and call it 'competition' One low offer that best suits your California mortgage needs Experienced loan officers with complete knowledge of mortgage financing No hassles or obligations - just great service! Refinance? Purchasing? Home Equity Loan? Fill out the online application below and'Take Command of Your Home Financing!' Personal First Name: Last Name: Address: City: State: Select One AL AK AZ AR CA CO CT DE FL GA HI ID IL IN IA KS KY LA ME MD MA MI MN MS MO MT NE NV NH NJ NM NY NC ND OH OK OR PA RI SC SD TN TX UT VT VA WA WV WI WY Zip Code: Phone Number: Email Address: Best Contact Time: Select One Morning Afternoon Evening Weekends Anytime We don't sell, lease, trade, rent, or otherwise disclose your information.For details see our Privacy Policy For any of your real estate home values visit USFreeAppraisals...as well, here's another California Mortgage Loan page...Visit JoelRealEstate at Orange County Real Estate . As well, be sure to visit our Los Angeles Real Estate resource for more Southern California Real Estate info. We recommend 123Refi for all of your mortgage prequalification and California Mortgage Loan needs.This is our Utah Mortgage Loan resource and this is our Nevada Mortgage Loan online resource. You can also visit this site for any of your Colorado Mortgage Loan inquiries. If you are interested in purchasing an auto dialer then click to this page. Loan Information Property Value: Occupancy: Select One Primary Residence 2nd Home Investment Property Property Type: Select One Single Family Residence Condo Townhome/PUD Duplex or Multi-Unit Will You Have A Co-Borrower? Yes No Monthly Debt: Your Credit: Select One Excellent Good Fair to Good Fair to Below Average Bad Bad with Bankruptcy Monthly Income: I can verify this income through either past 2 years W-2's, past 2 years Tax Returns, or past 12 months Bank Statements. I choose not to verify this income and prefer a 'Stated Income' option. For Refinance and Home Equity Loans Current Loan Amount: Current Interest Rate: Fixed Rate or Adjustable? Any Cash Out? Is this strictly a 2nd mortgage? 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Balloon Mortgage What is a Balloon Mortgage? When would it make sense for you? Adjustable Rate Mortgage Also known as ARM's or Variable Rate Mortgage. Explains advantages, common terms; what is a Negative Amortization Mortgage (Neg-Am); includes an 'Index Table' that explains Prime Rate, CODI, COFI, CMT, MTA, and LIBOR. Home Equity Loan - 2nd Mortgage Explains the difference between a Home Equity Loan (Home Equity Line of Credit or 'HELOC') and a 2nd Mortgage, as well as which may be best for you. FHA - VA Mortgage Covers government sponsored programs and their benefits. Includes FHA, VA, Cal Vet, as well as other state specific and local programs. Documentation Options What are the differences between Full Documentation (full doc), Limited Documentation (Limited Doc or 'Lite Doc'), Stated Income and 'No Income No Asset' (NINA) programs? How Can We Help You 'Beat The Banks'? 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Rental Property 10.1 Capital

Frequently Asked Questions - Keyword: Rental Property Home | Contact IRS | About IRS | Site Map | Español | Help Advanced Search Search Tips IRS Resources Compliance & Enforcement Contact My Local Office e-file Forms and Publications Frequently Asked Questions News Taxpayer Advocacy Where To File Frequently Asked Tax Questions And Answers Keyword: Rental Property 10.1 Capital Gains, Losses/Sale of Home: Property (Basis, Sale of Home, etc.) I lived in a home as my principal residence for the first 2 of the last 5 years. For the last 3 years, the home was a rental property before selling it. Can I still avoid the capital gains tax and, if so, how should I deal with the depreciation I took while it was rented out? If, during the 5-year period ending on the date of sale, you owned the home for at least 2 years and lived in it as your main home for at least 2 years, you can exclude up to the maximum dollar limit. However, you cannot exclude the portion of the gain equal to depreciation allowed or allowable for periods after May 6, 1997. This gain is reported on Form 4797. If you can show by adequate records or other evidence that the depreciation allowed was less than the amount allowable, the amount you cannot exclude is the amount allowed. Refer to Publication 523 , Selling Your Home and Form 4797 (PDF), Sale of Business Property for specifics on calculating and reporting the amount of gain. References: Publication 523 , Selling Your Home Publication 527 , Residential Rental Property Publication 587 , Business Use of Your Home Form 4797 (PDF), Sale of Business Property 11.1 Sale or Trade of Business, Depreciation, Rentals: Depreciation & Recapture Can the entire acquisition cost of a computer that I purchased for my business be deducted as a business expense or do I have to use depreciation? The entire acquisition cost of a computer purchased for business use can be expensed under Code section 179 in the first year if qualified, or depreciated over a 5-year recovery period. Under section 179, you can elect to recover all or part of the cost of certain qualifying property, up to a dollar limit, by deducting it in the year you place the property in service. You can elect to expense the cost of qualifying property instead of recovering the cost by taking depreciation. To claim the expense in the first year, the property must be used more than 50% for business use, and meet the other requirements for expensing. One of those requirements is that the total cost of qualifying property you can deduct after you apply the dollar limit is limited to the taxable income from the active conduct of any trade or business during the year. Any cost not deductible in one year under section 179 because of the business income limit can be carried to the next year. For any taxable year beginning after 2002 and before 2006, a new law raised the aggregate cost that can be expensed under section 179 to $100,000 and also expanded the definition of Code section 179 property to include off-the-shelf computer software. See IRS site for Code Section 179 for the expanded definition. If you make a choice to depreciate the property you can claim in the placed-in service year of the property a special depreciation allowance for eligible property you acquired after September 10, 2001 and before January 1, 2005. The special depreciation is figured before you calculate your regular depreciation. To qualify for the special depreciation the property must: Be property that is depreciated generally under MACRS (Modified Accelerated Cost Recovery System) and that has a recovery period of 20 years or less. Property required to be depreciated under the straight-line method of the alternative depreciation system of MACRS generally is not eligible. Be property that is acquired by you after September 10, 2001 and before January 1, 2005. Be property that is placed in service by you before January 1, 2005. Be property the original use of which began with you after September 10, 2001. This means that the property is new property. For eligible property acquired after September 10, 2001, and before May 6, 2003, the special depreciation deduction is equal to 30% of the property's depreciable basis. For eligible property acquired after May 5, 2003 and before January 1, 2005, the special depreciation deduction is equal to 50% of the property's depreciable basis. If the property is acquired after May 5, 2003, but there was a written binding contract to acquire the property in effect before May 6, 2003, the property is not eligible for the 50% special depreciation. Also, if the property is acquired after May 5, 2003, but the original use of the property began before May 6, 2003, the property is not eligible for the 50% special depreciation. And, if you acquired the property before May 6, 2003, but placed the property in service after May 5, 2003, the property is not eligible for the 50% special depreciation. If the property is eligible for the 50% special depreciation deduction and you claim this 50% depreciation, you cannot claim the 30% special depreciation deduction for the property. However, you can elect to deduct the 30% (instead of 50%) special depreciation for property eligible for the 50% special depreciation deduction. These elections are made for an entire class of property (for example, 5-year property) instead of for each property. If your property is located within the New York Liberty Zone, there are different rules for special depreciation deduction. See Publication 946 , How to Depreciate Property for additional information on the special deduction. References: Publication 946 , How to Depreciate Property Publication 535 , Business Expenses We have incurred substantial repairs to our rental property: new roof, gutters, windows, furnace, and outside paint. What are the IRS rules concerning depreciation? Replacements of roof, rain gutters, windows, and furnace on a residential rental property are capital improvements to the structure because they materially add to the value of your property or substantially prolong its life. The items would be in the same class of property as the rental property to which they are attached. Since the property is residential rental property, the items are generally depreciated over a recovery period of 27.5 years using the straight line method of depreciation and a mid-month convention. Repairs, such as repainting the residential rental property, are currently deductible expenses. A repair keeps your property in good operating condition. It does not materially add to the value of your property or substantially prolong its life. Repainting your property inside or out, fixing gutters or floors, fixing leaks, plastering, and replacing broken windows are examples of repairs. If you make repairs as part of an extensive remodeling or restoration of your property, the whole job is an improvement. In that case, you should capitalize and depreciate the repair costs as the same class of property that you have restored or remodeled as discussed above. For more information, refer to Publication 527 , Residential Rental Property , and Publication 946 , How to Depreciate Property . References: Publication 527 , Residential Rental Property Publication 946 , How to Depreciate Property 11.2 Sale or Trade of Business, Depreciation, Rentals: Rental Expenses v Passive Activity Losses (PALs) I purchased a rental property last year. What closing costs can I deduct? The only deductible closing costs are those for interest, and deductible real estate taxes. Other settlement fees and closing costs for buying the property become additions to your basis in the property. These basis adjustments include: Abstract fees, Charges for installing utility services, Legal fees, Recording fees, Surveys, Transfer taxes, Title insurance, and Any amounts the seller owes that you agree to pay, such as back taxes or interest, recording or mortgage fees, charges for improvements or repairs, and sales commissions. Fees related to obtaining a loan are capital expenses and should be amortized over the life of the loan. For additional information, refer to Publication 527 , Residential Rental Property, Publication 17 , Your Individual Income Tax Guide , and Publication 535 , Business Expenses . References: Publication 527 , Residential Rental Property Publication 17 , Your Individual Income Tax Guide Publication 535 , Business Expenses Can you deduct Private Mortgage Insurance (PMI) premiums on rental property? If so, which line item on Schedule E? Yes. You can deduct Private Mortgage Insurance premium on line 9 of Form 1040, Schedule E (PDF), Supplemental Income and Loss . Write "PMI" on the dotted line. References: Publication 527 , Residential Rental Property Form 1040, Schedule E (PDF), Supplemental Income and Loss Form 1040, Schedule E Instructions , Supplemental Income and Loss 11.3 Sale or Trade of Business, Depreciation, Rentals: Personal Use of Business Property (Condo, Timeshare, etc.) I rent my home out for two weeks each year. Do I have to show the income on my return? You must first consider if you use your dwelling as a home. You are considered to use a dwelling as a home if you use it for personal purposes during the tax year for more than the greater of 14 days or 10% of the total days it is rented to others at a fair rental price. It is possible that you will use more than one dwelling unit as a home during the year. For example, if you live in your main home for 11 months and in your vacation home for 30 days, your home is a dwelling unit and your vacation home is also a dwelling unit, unless you rent your vacation home to others at a fair rental value for more than 300 days during the year. There is a special rule if you use a dwelling as a home and rent it for fewer than 15 days. In this case, do not report any of the rental income and do not deduct any expenses as rental expenses. If you itemize your deduction on Form 1040, Schedule A (PDF), Itemized Deductions , you may be able to deduct mortgage interest, property taxes, and any casualty losses. For additional information, refer to Tax Topic 415 , Renting Vacation Property/Renting to Relatives and Publication 527 , Residential Rental Property (including Rental of Vacation Homes) . References: Form 1040, Schedule A (PDF), Itemized Deductions Tax Topic 415 , Renting Vacation Property/Renting to Relatives Publication 527 , Residential Rental Property (Including Rental of Vacation Homes). I am renting a house to my son and daughter-in-law. Can I claim rental expenses? In general, if you receive income from the rental of a dwelling unit, such as a house, apartment, or duplex, there are certain expenses you may deduct. Besides knowing which expenses may be deductible, it is important to understand potential limitations on the amounts of rental expenses that may be deducted in a tax year. There are several types of limitations that may apply. Passive Activity losses : In general, you can deduct passive activity losses only from passive activity income (a limit on loss deductions). You carry any excess loss forward to the following year or years until used, or until deducted in the year you dispose of your entire interest in the activity in a fully taxable transaction. There are several exceptions that may apply to the passive activity limitations. Refer to Publication 527 , Residential Rental Property and Publication 925 , Passive Activity and At-Risk Rules . At risk rules: The at-risk rules limit your losses from most activities to your amount at risk in the activity. You treat any loss that is disallowed because of the at-risk limits as a deduction from the same activity in the next tax year. If your losses from an at-risk activity are allowed, they are subject to recapture in later years if your amount at risk is reduced below zero. Refer to Publication 925 , Passive Activity and At-Risk Rules. Not for profit activities: If you do not rent your property to make a profit, you can deduct your rental expenses only up to the amount of your rental income. Any rental expenses in excess of rental income cannot be carried forward to the next year. Refer to Publication 527 , Residential Rental Property and Publication 535 , Business Expenses . Rental of a dwelling unit: The tax treatment of rental income and expenses for a dwelling unit that you also use for personal purposes (renting to a relative may be considered personal use even if they are paying you rent) depends on whether you use it as a home. Refer to Publication 527 , Residential Rental Property . Expenses in connection with rental of a dwelling unit for less than 15 days per year . Refer to Publication 527 , Residential Rental Property . References: Publication 527 , Residential Rental Property Tax Topic 414 , Rental Income and Expenses Tax Topic 415 , Renting Vacation Property/Renting to Relatives 11.4 Sale or Trade of Business, Depreciation, Rentals: Sales, Trades, Exchanges What form(s) do we need to fill out to report the sale of rental property? The gain or loss on the sale of rental property is reported on Form 4797 (PDF), Sale of Business Property . Form 1040, Schedule D (PDF), Capital Gains and Losses , is often used in conjunction with Form 4797. For further information, refer to Publication 544 , Sales on Other Disposition of Assets, Publication 550 , Investment Income and Expense , the Instructions to Form 4797 (PDF), Sale of Business Property , and the Instructions to Form 1040, Schedule D, Capital Gain and Losses . References: Form 4797 (PDF), Sale of Business Property Form 4797 Instructions Publication 544 , Sales and Other Dispositions of Assets Publication 550 , Investment Income and Expense Form 1040 Schedule D (PDF), Capital Gains and Losses We are selling rental property and have never claimed depreciation. What do we do about this when we file our taxes? When reporting the sale of or computing gain or loss on rental property, you are required to make an adjustment to your basis for allowable depreciation regardless of whether the deduction was taken. For more information refer to Publication 544 , Sales or Other Dispositions of Assets , and the Form 4797 Instructions , Sales of Business Property . You can claim the depreciation not taken for the rental property in the years before the year of sale. How to do this depends on when you placed in service the rental property. If you placed in service the rental property before calendar year 2003, you may amend your income tax returns for the years before the year of the sale by using Form 1040X (PDF), Amended U.S. Individual Income Tax Return , to take the depreciation deductions for the rental property that should have been taken. Or, you may file a Form 3115 (PDF), Application for Change in Accounting Method , to claim the depreciation for the rental property that should have been taken for the years before the year of the sale. The Form 3115 must be timely filed for the same tax year in which you sell the rental property. If you placed in service the rental property after calendar year 2002 and you have unclaimed depreciation for two or more years before the year of sale, you must use Form 3115 (PDF), Application for Change in Accounting Method , to claim the depreciation for the rental property that should have been taken for the years before the year of the sale. The Form 3115 must be timely filed for the same tax year in which you sell the rental property. If you placed in service the rental property after calendar year 2002 and you have unclaimed depreciation for only the year immediately preceding the year of sale, you may amend your income tax return for that prior year by using Form 1040X (PDF), Amended U.S. Individual Income Tax Return , to take the depreciation deduction for the rental property that should have been taken. Or, you may file a Form 3115 (PDF), Application for Change in Accounting Method , to claim the depreciation for the rental property that should have been taken for the prior year. The Form 3115 must be timely filed for the same tax year in which you sell the rental property. References: Publication 544 , Sales or Other Dispositions of Assets Form 1040X (PDF), Amended U.S. Individual Income Tax Return Form 3115 (PDF), Application for Change in Accounting Method Form 3115 Instructions , Application for Accounting Method Form 4797 Instructions , Sales of Business Property Publication 527 , Residential Rental Property (including Vacation Homes) What forms do we file to report a loss on the sale of a rental property? The loss on the sale of rental property is reported on Form 4797 (PDF), (Sale of Business Property) as ordinary loss. References: Form 4797 (PDF), Sale of Business Property Publication 544 , Sales and Other Dispositions of Assets More Frequently Asked Tax Questions Accessibility | FirstGov.gov | Freedom of Information Act | Important Links | IRS Privacy Policy | U.S. Treasury

investment property advertisement If

MSN Money - How to find good investment property MSN Home Hotmail My MSN Sign In Money S earch MSN Money: Help Home News Banking Investing Planning Taxes My Money Portfolio Loans Insurance Investing Home Portfolio Markets Stocks Funds ETFs Commentary Brokers CNBC TV MSN Money Insight Jubak's Journal SuperModels Start Investing Strategy Lab Company Focus Mutual Funds Street Patrol Other Views Contrarian Chronicles TheStreet.com Resources Commentary Index Decision Centers Start Investing Mutual Funds Find Hot Stocks Simple Strategies Power Tools Investing For Income Real Estate Related Links Expert Picks Market Dispatches CNBC Stock Picks Message Boards Print-friendly version Send this to a friend Research any REIT Find top-performing mutual funds Sortable database of SEC filings Find stock winners with our screener Personal finance bookshelf Find It! Article Index Finance Q&A Tools Index Site Map Recent articles by Liz Pulliam Weston: • Streamline your finances in 8 steps , 1/12/2003 • Ditch all fees for online banking services , 1/12/2003 • In clash of debit-card titans, consumers lose , 1/12/2003 More... Related Sites American Association of Small Property Owners Rental Property Reporter National Real Estate Investors Association The Basics How to find good investment property advertisement If you're cut out for it, life as a landlord can be quite profitable. But success isn't assured. Here's what you need to know before diving in. By Liz Pulliam Weston The idea of owning rental real estate seems to be gaining popularity as investors tire of the swoops and swoons of the stock market. As I pointed out in a separate column , not everyone has what it takes to be a landlord. But those who do may find rentals to be a good way to build wealth. Once youve made the decision to buy rental property, your real work begins. Finding a profitable rental property usually takes time, connections and plenty of research. Heres what you need to know to get started: Start investing with $100. Explore our new ETF center. Know your time horizon As with any other investment, you should have a good idea how long you plan to own a rental property before you buy it, says Robert Cain, publisher of the Rental Property Reporter newsletter. The longer you plan to own the property, the more youll probably need to invest in maintenance, repairs and improvements, Cain said. If youre keeping it for 20 years, at some point youre going to be putting a new roof on that property. Youre going to be putting in new appliances and doing some major repairs, Cain said. If youre only planning to own a property for five years, by contrast, youll probably want to avoid making any major improvements unless youre sure you can recoup the cost with a higher sale price. You also may face more investment risk with a shorter time horizon. Although your rental will almost certainly appreciate over 20 years, it could easily lose value in the next five, particularly if youre buying in an overheated market. Youll need a bigger potential annual return to make up for that risk. For many small investors, long-term ownership makes the most sense, said Pat Callahan, an attorney, landlord and founder of the American Association of Small Property Owners. Youll have plenty of time to ride out any swings in the market, and rental income can make a nice supplement to your day job. Find enough rental properties, and being a landlord may become your day job. Develop a network Experienced landlords find their properties in a variety of ways. Some hunt for foreclosures, making friends with city hall clerks or bank employees who know which properties are about to be sold. Some run ads in local newspapers. Others work with real estate agents who keep their eyes peeled for possible buys. Several landlords recommended joining a local landlord or property owner's association to make contacts. Callahans Web site offers links to local groups, as does the National Real Estate Investors Association. (See the links at left under "Related Sites.") When you begin to own rentals, all the other investors start coming out of the woodwork, said Sean Hoppe, a landlord in Pottsville, Pa., who owns 11 properties. Through investor meetings, networking, etc., I can find out what is for sale. (Hoppe, by the way, is 25 and hopes to retire from his job as a computer consultant in three years.) You also can try approaching landlords directly to see if theyre willing to sell, by calling the numbers listed on rental ads in the classifieds, by cruising neighborhoods looking for for rent signs or by talking to any landlords you know personally. Thats how Bob, who asked that his last name not be used, bought his rental property near Albany, N.Y. The landlord of the three-unit building where Bob had rented for 15 years was tired of the hassles and ready to sell. We love (the area) and jumped at the chance to buy it, Bob said. So far, Bob and his wife have been pleased with their purchase. They raised rents and required security deposits, which caused the propertys less desirable tenants to leave. He also has a backup plan for the building in case he starts to feel like the prior owner. If being a landlord got to be too big a hassle, Bob said, we would just get rid of the tenants and make it our own place. Get your finances in shape The better your credit, and the less credit card and other consumer debt you have, the better your prospects for getting a decent loan, Callahan said. Lenders usually require bigger down payments, higher interest rates and generally stronger finances when youre buying rental property. Thats because they know people are more likely to default on investment property than they are on their own homes. Landlords say it also pays to have a substantial cash reserve left over after buying a property. This can help pay for unexpected repairs and vacancies. Although there are few rules of thumb, setting aside at least one months rent for each unit is a good start. CPA Paul Berning suggests having a line of credit, secured either by the property or your own home, to cover larger costs. You also should make sure you can save enough for retirement and other goals before investing in rental real estate. While rental income can supplement your retirement kitty, most people shouldnt count on it to replace other investments or allow themselves to be entirely exposed to the whims of the local real estate market. Rents and property values can fall as well as rise, and those who are adequately diversified with investments in stocks, bonds and cash will be better able to endure the bad times as well as the good. Avoid overpaying As one experienced landlord put it: You make your profit when you buy a property, not when you sell it. Pay too much, and youll never recoup as much as you could have had you driven a better bargain. The rental real estate market is generally tougher on investors who overpay than on homeowners who do the same thing, several landlords said. While a home is often an emotional purchase, which can lead to I must have it! offers and bidding wars, most landlords look strictly at the numbers to see if their investments will pay off. If you pay too much for a rental, you cant count on a greater fool coming along later to bail you out. Not overpaying can be tough in a hot market, however. Apartments in New York, for example, currently sell at a 60% premium over their inherent value. In other words, theyre selling for much more than the income streams the apartments generate, according to Reis, a national real estate research firm. In San Francisco and Los Angeles, the premium is 10%. Some landlords use formulas, such as not paying more than six to eight times the rents they expect to make the first year. Others try to estimate what the property could be worth after needed repairs and upgrades are made, and they dont pay more than 70% of that price, less the cost of those repairs, CPA Berning said. Every real estate market is different, however, and these formulas may not work in your area. Whats key is to make sure your rental income will cover your out-of-pocket costs, Berning said. That includes the mortgage payment on the property, as well as taxes, insurance, maintenance, repairs and a vacancy rate of around 5%. (If you have five units, for example, you should expect at least one unit to be empty three months each year. Heres the math: 5 units times 12 months equals 60; 60 times .05 is 3.) If you can at least break even, youll be able to profit from any price appreciation as well as from tax breaks available to rental property. Cains Web site sells $55 software to help you make these calculations (see link at left). When crunching the numbers, you should know that theres a big difference in how repairs and improvements are treated for tax purposes. You can typically deduct the cost of a repair, such as patching a roof or fixing a leaking pipe, on your tax return for the year in which the repair is made, Berning said. Replace that roof or those pipes, however, and its typically considered an improvement, which means the cost cant be deducted. Instead, its added to the amount you paid for the property to determine your tax basis when you sell. The higher the basis, the lower your taxable profit. But if you have to wait 20 years after making a major improvement to recoup any of the cost for tax purposes, you may think twice about buying a property that needs a lot of upfront work, Berning said. To better estimate your costs, get a thorough inspection before you buy a property. Some landlords have favorite electricians, plumbers and contractors that they send to any prospective property, promising them that they can do any repair work they find. Others use professional inspectors they trust. Longtime landlords say all this work pays off in profitable properties that build their net worth while providing a steady income stream. Callahan, whose family started investing in rental real estate in the 1940s, says its a way of life she recommends. It doesnt matter if youre a professional or a laborer, Callahan said. Its the equal-opportunity wealth builder. 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