In a message dated 1/21/02 11:24:20 AM Central Standard Time,
[EMAIL PROTECTED] writes:
<< > Minnesota is one of a few freak states that tax a rental home at
> a much higher rate than an owned home. Why???
>
Because it encourages owner-occupancy and because a rental property is not
a homestead. It exists for business purposes, i.e. to make profit
therefore it is taxed as both a property and as a business. For example, I
could make decent money on my house if I rented it out and bought a
different one somewhere else. This would deprive someone of the same
benefit I have, i.e. an affordable place to live, so if I rent it instead
of live in it, I can expect to pay higher taxes.
As it is, I pay less for mortgage, insurance and taxes than any of my
friends pay for rent alone, and I get equity and tax deductions. What does
a renter get? A place to live, yes - but no long term security, no equity,
no tax deductions (although there are rent rebates.) Rental housing exists
to make a profit off of others' need for housing.
>>
Keith suggests the converse; Rental housing does not exist where an
investor is unable, "...to make a profit off of others' need for housing."
And we appear to have had a rental property availability shortfall here in
town for a while. But, dear "Rshmid-Mpls", if you believe you, "...could make
decent money on my house if I rented it out and bought a different one
somewhere else.", give it a go. Your city needs you. I am sure you are well
prepared to handle the vicissitudes of the rental biz. You probably also have
ample time to devote to that one rental property you will be managing "24/7".
There are, of course, a few small risks involved as you rack up your "long
term security", your "equity", and your "tax deductions", which you appear to
suggest are guaranteed benefits to investors. I will not detail the risks
here/now but I will invite you to examine and enjoy my "Bullet-hole
collection" accrued and savored (not severed) while owning and operating my
rental property on West Broadway. The latest addition to this
specialty-collectible was acquired in 2001 at 2xxx Penn Ave. n. And for you
bullet-hole aficionados, and leisure time investors like "Rschmid" would
fancy himself, I can tell you: It is a dooosey. It went in one end of the
sunporch, just above a chair-back, passed across the room, and exited above
another chair back into the living room wall. And the tenant told me her and
a friend had been sitting in those two chairs an hour earlier. No, it does
not get any better then that; well not much.
The other small risk to "Rschmid" may be exemplified by the huge number
of boarded up homes and vacant lots where once stood our city's affordable,
and rental housing, stock. And the 10's of thousands of eviction actions in
our court records. Might the folks who once owned these buildings lost there
"long term security", "equity", and "tax deductions"? Of course. Were they
less; intelligent, honorable, or hard working then you, "Rschmid"? I doubt
it. But they "been there/done that" and they are not going to do it again;
hence the apparent shortage. So hop on "Rschmid", and good luck in you new
pastime.
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