Primary residence converted to a rental property & tax implications
You will need to look at the 27.5 year depreciation table from the IRS. It tells you how you will be able to write off the first year. It depends on which month you had the unit ready to rent. Note that that it might be a different month from when you moved, or when the first tenant moved in. Your list is pretty good. You can also claim some travel expenses or mileage related to the unit. Also keep track of any other expenses such as switching the water bill to the new renter, or postage.  If you use Turbo tax, not the least expensive version, it can be a big help to get started and to remember how much to depreciate each year. Schedule E is the form you'll use. It lists nearly all deductions you can take for a rental. TurboTax Deluxe will handle it and it includes State Filing.
Let's assume that the bonds have a par value of $1,000.  If conversion happens, then one bond would be converted into 500 shares.  The price in the market is unimportant.  Regardless of the share price in the market, the income per share would be increased by the absence of $70 in interest expense.  It would be decreased by the lost tax deduction.  It would be further diluted by the increase in 500 shares.  Likewise, the debt would be extinguished and the equity section increased.  Whether it increased or decreased on a per share basis would depend upon the average amount paid in per share in the currently existing structure, adjusted for changes in retained earnings since the initial offering and for any treasury shares. There would be a loss in value, generally, if it is trading far from $2.00 because it would be valued based on the market price.  Had the bond not converted, it would trade in the market as a pure bond if the stock price is far below the strike price and as an ordinary pure bond plus a premium if near enough to the strike price in a manner that depends upon the time remaining under the conversion privilege.   I cannot think of a general case where someone would want to convert below strike and indeed, barring a very strange tax, inheritance or legal situation (such as a weird divorce), I cannot think of a case where it would make sense.  It often does not make sense to convert far from maturity either as the option premium only vanishes well above $2.  The primary case for conversion would be where the after-tax dividend is greater than the after-tax interest payment. "No, it can really not. Look at Detroit, which has lost a million residents over the past few decades. There is plenty of real estate which will not go for anything like it was sold. Other markets are very risky, like Florida, where speculators drive too much of the price for it to be stable. You have to be sure to buy on the downturn. A lot of price drops in real estate are masked because sellers just don't sell, so you don't really know how low the price is if you absolutely had to sell. In general, in most of America, anyway, you can expect Real Estate to keep up with inflation, but not do much better than that. It is the rental income or the leverage (if you buy with a mortgage) that makes most of the returns. In urban markets that are getting an influx of people and industry, however, Real Estate can indeed outpace inflation, but the number of markets that do this are rare. Also, if you look at it strictly as an investment (as opposed to the question of ""Is it worth it to own my own home?"") there are a lot of additional costs that you have to recoup, from property taxes to bills, rental headaches etc. It's an investment like any other, and should be approached with the same due diligence." "I don't believe it makes a difference at the federal level -- if you file taxes jointly, gains, losses, and dividends appear on the joint tax account.  If you file separately, I assume the tax implications only appear on the owner's tax return.  Then the benefits might outweigh the costs, but only if you correctly predict market behavior and the behavior of your positions. For example, lets say you lose 30k in the market in one year, and your spouse makes 30k.  If you're filing jointly, the loss washes out the gain, and you have no net taxes on the investment.  If you're filing separately, you can claim 3k in loss (the remaining 27k in loss is banked to future tax years), but your spouse pays taxes on 30k in gain. Where things get more interesting is at the state level.  I live in a ""community property state,"" where it doesn't matter whether you have separate accounts or not.  If I use ""community money"" to purchase a stock and make a million bucks, that million bucks is shared by the two of us, whether the account is in my name our in our name.  income during the marriage is considered community property.  However property you bring into the marriage is not.  And inheritances are not community property -- until co-mingled. Not sure how it works in other states.  I grew up in what's called an ""equitable property state.""" A good quick filter to see if a property is worth looking at is if the total rent for the property for the year is equal to 10% of the price of the property.  For example, if the property is valued at $400,000 then the rent collected should be $40,000 for the entire year.  Which is $3,333.33 per month. If the property does not bring in at least 10% per year then it is not likely all the payments can be covered on the property.  It's more likely to be sinking money into it to keep it afloat. You would be exactly right, as you have to figure in insurance, utilities, taxes, maintenance/repair, mortgage payments, (new roof, new furnace, etc), drywall, paint, etc. Also as a good rule of thumb, expect a vacancy rate of at least 10% (or 1 month) per year as a precaution. If you have money sitting around, look into Real Estate Investment Trusts.  IIRC, the average dividend was north of 10% last year.  That is all money that comes back to you.  I'm not sure what the tax implications are in Australia, however in Canada dividends are taxed very favourably.  No mortgage, property tax, tenants to find, or maintenance either. "Is all interest on a first time home deductible on taxes? What does   that even mean? If I pay $14,000 in taxes will My taxes be $14,000   less. Will my taxable income by that much less? If you use the standard deduction in the US (assuming United States), you will have 0 benefit from a mortgage.   If you itemize deductions, then your interest paid (not principal) and your property tax paid is deductible and reduces your income for tax purposes.  If your marginal tax rate is 25% and you pay $10000 in interest and property tax, then when you file your taxes, you'll owe (or get a refund) of $2500 (marginal tax rate * (amount of interest + property tax)). I have heard the term ""The equity on your home is like a bank"". What   does that mean? I suppose I could borrow using the equity in my home   as collateral? If you pay an extra $500 to your mortgage, then your equity in your house goes up by $500 as well.   When you pay down the principal by $500 on a car loan (depreciating asset) you end up with less than $500 in value in the car because the car's value is going down.   When you do the same in an appreciating asset, you still have that money available to you though you either need to sell or get a loan to use that money. Are there any other general benefits that would drive me from paying   $800 in rent, to owning a house? There are several other benefits. These are a few of the positives, but know that there are many negatives to home ownership and the cost of real estate transactions usually dictate that buying doesn't make sense until you want to stay put for 5-7 years.   A shorter duration than that usually are better served by renting.  The amount of maintenance on a house you own is almost always under estimated by new home owners." "I'm answering your ""or what are the ways of switching houses?"" question...  The most common way that I've done this for a personal residence is with the following steps:  What I think you may really be asking is, ""how do I juggle the fact that I want to move to a new house but I have a current home and mortgage?  Two key pieces of the process are:  Hopefully that helps--plenty of people make their next home purchase contingent on the sale of an existing property." Your parents would file their taxes as they normally do. It would be as if your parents were landlords renting a room to your girlfriend. She would not be claimed on their taxes. If your girlfriend pays rent to your parents (through her parents or otherwise) it would be claimed as rental income. The household size wouldn't change because even though your girlfriend is living with your parents they are not financially responsible for her. Example: A landlord would not claim renters as dependents or in household size on their taxes. Since then I wanted to move out of this house because the property taxes are so high and the mortgage payment is a killer. As I understand this is a property jointly owned by your parents and you. As they are not living staying in the house, you have taken over the mortgage payments for this house along with any other maintenance. If you move out of this house; the rent is expected to cover the cost of maintenance and mortgage payments. Are we better of staying in Jersey where our family and friends are?  This is an individual decision. It is not just family and friends, but also schooling of kids, penitentially if you change jobs would it also entail changing residence as the workplace would be more near from current home than the new home. I want to convince my wife to make this move because it will save us at least 800 month, but she fails to see how buying a second home is financially sound because we have to lose our savings and we have to pay interest on our second home. There are quite a few posts on first-time-home-buyer Some question like this one and this one and this one are good reads. There are historically times when the Mortgage EMI becomes equal or less than Rent paid. In such times it is good to buy home, than pay rent. Otherwise quite a few invest advisor's mention that fools buy house and wise live in it. There are advantages to buying as well advantages to renting. There is no simple answer and it depends on multitude of factors.