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Financial Planning / Tax Strategies


Subject:  Peter Date:  6/20/2012  12:54 AM
Author:  Donna405 Number:  116297 of 131397

Regarding the passive versus active income, Phil followed up with a question upon which I would really like an answer, if you know.

Here is Phil's question: "But back to OP's question. Clearly, if she uses the management company to do everything, she's not actively participating. But how about her other scenario; is that active enough? I've never been clear on this."

My question was.....if I get a management company to only screen tenants and collect the rents, while I actively manage the property otherwise, would it be active or passive income? I have my own vendors whom I prefer. When I rented the house previously, I could call whatever vendor and they appeared "johnny on the spot" in less than 12 hours to perform the repair, and I would either give them my credit card or immediately write them a check.

We hae some management companies here in Columbia, who add a markup to the repairman's invoice, pocketing the difference. I will not go for that, and I trust the people I have dealt with in the past. These are companies and individuals with whom my late parents also transacted business, and I value their reputations, service and quality of work.

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