Rental Properties: Is it good or bad that I can't find rental listings on that street?
Finding Zero is the expected result of your Craigslist check. You will have to do a lot more research. A local agent can help you determine the number of days they stay on the market before they are rented. They can also help determine the spread between purchase costs and rental cost. You will also have to figure in the cost of hiring a local management company, if you don't want to drive to Syracuse every time the renter has a problem in the middle of the night, or in the middle of a blizzard. "Based on the information you gave, there are dozens if not hundreds of possible theories one could spin about the rental market. Sure, it's possible that there are no listings because rental units on this street are quickly snapped up. On the other hand, it's also possible that there are no listings because almost all the buildings on the street have been abandoned and, aside from this one property that someone is tying to sell you, the rest of the street is inhabited only by wild dogs and/or drug dealers. Or maybe the street is mostly owner-occupied, i.e. the properties are not being rented to anyone. Or maybe it's a commercial district. Or maybe craigslist isn't popular with people who own property on this street for whatever reason. Maybe Syracuse has a city ordinance that says property must be advertised in the newspaper and not on websites, for all I know. Or maybe you missed it because nobody in Syracuse calls it ""housing for rent"", they all call it ""apartments for rent"" or ""houses for rent"" or some local phrase. Or ... or ... or. Before I bought a property, I'd do more research than one search on one web site. Have you visited the property? I don't know how much you're preparing to invest, I have no idea what property prices are in Syracuse, but I'd guess it's at least tens of thousands of dollars. Surely worth making the drive to Syracuse to check it out before buying."
It depends on the terms of the lease, but it's hard to imagine a lease that would allow to do this unilaterally with no strings attached.  That means it actually depends not on how much you like your landlady, but on how much she likes you. In general, by signing the lease you assume a contractual obligation to pay the rent every month for the entire term of the lease.  In theory, you can be sued if you don't do that. In practice, a lot depends on your relationship with your landlord, as well as the rental market in your area.  If the landlord can easily find a replacement tenant, they may be willing to allow you to leave early.  If the rental market is slow, they will be more likely to hold you to the agreement.  Obviously, if you have a good relationship with the landlord, they may be more inclined to go easy on you. As far as telling your landlady you want to terminate the lease early, unless she's a particularly nasty person, you can just go ahead and tell her you'd like to leave early.  What you can't do is actually stop paying rent.  If you're on reasonably good terms with your landlady, you could just tell her your situation and say you'd like to move out.  She may be willing to work out an arrangement where she lists the apartment while you're still living there, allows prospective tenants to view it while it's occupied, and then has you move out if and when someone else wants to move in (e.g., at the end of the month).  Again, exactly how this works will probably depend on the rental market. Assuming you're in the USA, here is a useful page with some info on breaking a lease.  As mentioned there, the legal details vary by state. Should I treat this house as a second home or a rental property on my 2015 taxes? If it was not rented out or available for rent then you could treat it as your second home. But if it was available for rent (i.e.: you started advertising, you hired a property manager, or made any other step towards renting it out), but you just didn't happen to find a tenant yet - then you cannot. So it depends on the facts and circumstances. I've read that if I treat this house as a rental property, then the renovation cost is a capital expenditure that I can claim on my taxes by depreciating it over 28 years. That is correct. 27.5 years, to be exact. I've also read that if I treat this house as a personal second home, then I cannot do that because the renovation costs are considered non-deductible personal expenses. That is not correct. In fact, in both cases the treatment is the same. Renovation costs are added to your basis. In case of rental, you get to depreciate the house. Since renovations are considered part of the house, you get to depreciate them too. In case of a personal use property, you cannot depreciate. But the renovation costs still get added to the basis. These are not expenses. But does mortgage interest get deducted against my total income or only my rental income? If it is a personal use second home - you get to deduct the mortgage interest up to a limit on your Schedule A. Depending on your other deductions, you may or may not have a tax benefit. If it is a rental - the interest is deducted from the rental income only on your Schedule E. However, there's no limit (although some may be deferred if the deduction is more than the income) if you're renting at fair market value. Any guidance would be much appreciated! Here's the guidance: if it is a rental - treat it as a rental. Otherwise - don't. "There are actually a few questions you are asking here. I will try and address each individually. Down Payment What you put down can't really be quantified in a dollar amount here. $5k-$10k means nothing. If the house costs $20k then you're putting 50% down. What is relevant is the percent of the purchase price you're putting down.  That being said, if you go to purchase a property as an investment property (something you wont be moving into) then you are much more likely to be putting a down payment much closer to 20-25% of the purchase price. However, if you are capable of living in the property for a year (usually the limitation on federal loans) then you can pay much less. Around 3.5% has been my experience. The Process Your plan is sound but I would HIGHLY suggest looking into what it means to be a landlord. This is not a decision to be taken lightly. You need to know the tenant landlord laws in your city AND state. You need to call a tax consultant and speak to them about what you will be charging for rent, and how much you should withhold for taxes. You also should talk to them about what write offs are available for rental properties. ""Breaking Even"" with rent and a mortgage can also mean loss when tax time comes if you don't account for repairs made. Financing  Your first rental property is the hardest to get going (if you don't have experience as a landlord). Most lenders will allow you to use the potential income of a property to qualify for a loan once you have established yourself as a landlord. Prior to that though you need to have enough income to afford the mortgage on your own.  So, what that means is that qualifying for a loan is highly related to your debt to income ratio. If your properties are self sustaining and you still work 40 hours a week then your ability to qualify in the future shouldn't be all that impacted. If anything it shows that you are a responsible credit manager.  Conclusion I can't stress enough to do YOUR OWN research. Don't go off of what your friends are telling you. People exaggerate to make them seem like they are higher on the socioeconomic ladder then they really are. They also might have chicken little syndrome and try to discourage you from making a really great choice. I run into this all the time. People feel like they can't do something or they're to afraid so you shouldn't be able to either. If you need advice go to a professional or read a book. Good luck!" how much taxes would I pay on my income from the rent they would pay me? The same as on any other income. California doesn't have any special taxes for rental/passive income. Bothe CA and the Federal tax laws do have special treatment, but it is for losses from rental. Income is considered unearned regular income and is taxed at regular brackets. Would I be able to deduct the cost of the mortgage from the rental income? The cost of mortgage, yes. I.e.: the interest you pay. Similarly you can deduct any other expense needed to maintain the property. This is assuming you're renting it out at FMV. If not, would I pay the ordinary income tax on that income? In particular, would I pay CA income tax on it, even though the property would be in WA? Yes. Don't know how WA taxes rental income, but since you are a California tax resident - you will definitely be taxed by California on this, as part of your worldwide income. Moreover to make items easier, company owners can uncover several expert neighborhood company listing support providers inside the industry nowadays. The professionals support increases the effects of [local business listing](http://come2ourdeals.com.au) with the aid of Seo Google Maps and numerous others. Why is that this crucial? Given below would be the 5 rewards. "Ah .. I don't know Chicago very well, but several classmates ended up there and report that real estate + tax are expensive. Here in Philadelphia, several marginal neighborhoods are in the middle of a real estate boom (some say bubble). People are demanding new construction, but don't care where it is. 600k for a row home is pretty common in Kensington. Same old gentrification story .. first the artists moved in for cheap rents, then coffee shops and then the developers. For those not aware, those parts of Kensington was ground zero for the 1980's crack/crime epidemic .. only the most marginal of blue collar workers couldn't afford to leave.   Sounds like Gary, Ind got themselves on the wrong side of that line. Maybe in a couple decades it will get ""rediscovered"". Kinda sad, but we do have a history of letting places fail (eg. Wild West ghost towns)." "It's not a fallacy, I'm pointing out you're complaining about housing prices but unwilling to find better ones. As I pointed out (and you ignored) those housing prices are regarding convenience. With a little bit of a drive, you could find ""afforable"" housing instead of renting and voila! nothing to complain about.  If you want a better house, then get a better job. It's not rocket science. Someone on minimum wage isn't going to be able to afford a house in downtown DC or surrounding area." Interesting point. I hadn't considered the general market so much as the large retail locations like malls.   I'm very interested in the effect of reduced foot traffic as major anchor tenants leave malls.   Most food court restaurants / chain retail like footlocker etc operate on slim margins except at holidays / high spending periods.