Hey there
In 2022 i want to start buying single family homes and possibly triplexes and renovate them and rent them out to other people. I want to setup a network of homes & my goal will be 5-10 to start.
my question is do i need to start a whole new business if I already have a sole proprietor setup currently under my gym business?
Also what is the best route to file as for when i start buying properties and renting them out?
If you can please link some additional information so i can learn the best strategies for leverage my money as well as protecting it from taxation.
I want to produce eventually have 100s of homes as rental properties to create a surplus of cashflow so my family and I can create generational wealth to provide for our family and my kids.
thank you for your help!
Hello @Crgroadrebel88 , great question!
If you meet the following criteria:
Then you will file a distinct Schedule C for your business buying/renovating/renting out rental properties. In general, you will consider all the property you own to be business assets, and the rental income will be considered business income. Here is a link with information geared toward real estate professionals: https://turbotax.intuit.com/tax-tips/self-employment-taxes/tax-tips-for-real-estate-agents-and-brokers/L6JBCu3uH
If you do not meet both of the criteria above, your activity renting out the property will be claimed on Schedule E as passive rental income. Here is a great link that describes in great detail how passive rental property income is taxed and all the tax implications: https://turbotax.intuit.com/tax-tips/rental-property/real-estate-tax-and-rental-property/L3e09vT71
Either way, rental property is a great income source and good on you for chasing your dream!