Rehab Depreciation - Question
Hello,
How does depreciation work on rehabbed buy&hold properties? For example, I bought a house with hard money for $85,000, put ~$10,000 into repairs to bring the appraised value up to $135,000. I then refinanced at 80% of the new apr. value. When I depreciate this year, will I use the a) original purchase price, b) original purchase price + rehab $, c) the apr value at time of refianance, or d) other. This property is an SFR residential unit built in 1960 (not historic).
Thank you for your help!
Thanks, that helped clear it up. So I should itemize the rehab to break it down into the various depreciable components, or just generalize the rehab as a rennovation since it was "mostly" the large scale type project that you used as an example. I really appreciate the help!