When should I remodel my rental?

Did you know the timing of your remodel can change your total deductions, even with the same dollars spent? Let's take a look.

Start by putting the home in service. List it, and make it available to book, even if it's dated and bookings are slow. Then remodel.

That interior work is now qualified improvement property, or QIP. It's 15-year property, so 100% of what you invested comes back in year one.

And you get the disposition. The old parts you tore out are written off too. That's about $400K in year-one deductions, from a $200K remodel.

Now flip it. If you remodel before you host your first guest, only about a quarter of it gets accelerated. That's because work done before the home is placed in service gets folded into the building. You lose the disposition, and most of the remodel waits 39 years. So hosting first can generate almost eight times the deductions of remodeling first.

Place in service, plus disposition, plus 100% QIP, equals your maximum supportable deduction. Visit unlevered.io/hello. Cost seg made simple, and defensible.