Rental Property

[Gthunter5]

Hi Guys

not sure if any of you have done this

I have a second home on the lake and as we've had kids we get up there less and less. Ive always treated it as a second home.

I'd like to either VRBO or rent it long term starting 1/1/2023. possibly 3-5 years while the kids are in the sports mix. the goal is to have someone else help pay it off while we are not using it.

Do you treat it as an investment property during that time it is rented or listed to rent? If I VRBO it I'm aware of the 14 day rule ie <14 days its still a second home. as well as if its an investment property it must be used by me <14 days.

if I treat it as an investment property for a few years can that be undone ?

Thanks

[getfished]

I know a guy who has several rental properties that are packaged into a self directed IRA. Maybe that is something of interest to you.

[idbefishing]

Hi Guys

not sure if any of you have done this

I have a second home on the lake and as we've had kids we get up there less and less. Ive always treated it as a second home.

I'd like to either VRBO or rent it long term starting 1/1/2023. possibly 3-5 years while the kids are in the sports mix. the goal is to have someone else help pay it off while we are not using it.

Do you treat it as an investment property during that time it is rented or listed to rent? If I VRBO it I'm aware of the 14 day rule ie <14 days its still a second home. as well as if its an investment property it must be used by me <14 days.

if I treat it as an investment property for a few years can that be undone ?

Thanks

I'm pretty sure as long as you're no longer file the rental money as income on your 1040. It isn't consider investment property. If in your shoes, I'd sell it because being a landlord is a PITA. From my personal experience anyway and I even had an awesome tenant.

[Roddy]

Airbnb, is the money maker. My buddy nets over 100k a year off his beach house and is trying to buy another in The Smokies.

[TwinStick]

Just curious, where is it?

[Rangerdeepv]

Decent property management company makes all the difference. I would not do it as it still is a major PITA but lots of people do and make decent $$$$ doing it.

[Gthunter5]

ive toyed with selling it but don't want the tax implications and I don't want to get rid of it

its on Hartwell

[SRYE]

If you are concerned about SC property taxes, I believe 2nd homes and investment properties are taxed at the same 6% rate. If you are asking about federal income tax implications, yes you can "undo" the investment status. When you decide to sell, if you have lived in the property 2 of the previous 5 years, it is not considered investment property. And you don't have to pay capital gains on the profits.

[idbefishing]

You’ll pay long term capital gains tax if profits is over 250K

[txbass1]

Hi Guys

not sure if any of you have done this

I have a second home on the lake and as we've had kids we get up there less and less. Ive always treated it as a second home.

I'd like to either VRBO or rent it long term starting 1/1/2023. possibly 3-5 years while the kids are in the sports mix. the goal is to have someone else help pay it off while we are not using it.

Do you treat it as an investment property during that time it is rented or listed to rent? If I VRBO it I'm aware of the 14 day rule ie <14 days its still a second home. as well as if its an investment property it must be used by me <14 days.

if I treat it as an investment property for a few years can that be undone ?

Thanks

IMHO, you would do well to spend a hundred bucks or so to talk it over with a qualified CPA. There are depreciation recapture rules that come into play that need to be discussed.

[av]

Rent it to a tenant that pays cash , dont claim the income

[Gthunter5]

may or may not have done that

its on the ga side. its always been a second home deal. if I sell - im not ready for a 1031 and don't want to pay the cap gains.

Rent it to a tenant that pays cash , dont claim the income

[Aj14]

Airbnb, is the money maker. My buddy nets over 100k a year off his beach house and is trying to buy another in The Smokies.

I will definitely second that.

[RedShad]

You cannot do a 1031 exchange of personal use real estate. To qualify for a 1031 exhange it must be investment property and although there may be an investment motive for owning a second home, the IRS considers the personal use to be the main purpose of ownership. Once you convert it to rental it may become investment property. There are rules for that too. As mentioned, get professional advice.

[av]

Airbnb, is the money maker. My buddy nets over 100k a year off his beach house and is trying to buy another in The Smokies.

The hammer is coming down on airbnb at some locations , Boston is leaning towards only airbnb in owner occupied , the area where my second home is in NH they are taxing heavy, the guy across from me who rented his cabin every weekend gave it up to much taxes he said , town tax,state tax, income tax. The state is treating it like a motel. I am sure some areas are not on to taxing yet.

[BarryFL]

I lot of communities in FL are now treating AirBnB like hotels ("transient housing" with associated taxes, codes, etc...). FL has hotel room taxes that vary by county, IIRC. AirBnB was not consistently collecting nor paying those taxes. Also, HOA/POA/COAs are changing by-laws to not/NOT allow short term rentals because people are tired of putting up with "block" parties every weekend.

[BMCD]

We did nightly rentals on ours, and made a killing, but alas the allure of living there caught up to us.

[DaveBrabec]

Tried the landloard thing.At one time we had 2 rentals.To much $$$ to fix everything .renters suck.

[LewStulePH.D.]

My buddy nets over 100k a year off his beach house and is trying to buy another in The Smokies.

Roddy- I'm going to crawl out on that proverbial limb and type that a beach house in The Smokies may be like hunting a grail ala Dr. Jones from the Hoosier™ State...

I'm jaded though as the turds that rented our Country Club house wrecked both the beautiful Zoysia™ I actually worked at raising and the pool/hot tub combo.. Then they skipped out on rent and the group who rented the place was contacted their reply was "YOU can try and sue them civilly, but we're already paid off on OUR end..." Thats the new 'teamwork™' which is 'i got mine; screw You; piss up a rope; don't have a rope? I can sell You one..

[Charles Prestridge]

Airbnb, is the money maker. My buddy nets over 100k a year off his beach house and is trying to buy another in The Smokies.

That is strong to net $2,000 per week on a beach house.

Is that one house?

More like netting $3,000 per rented week, for the non-reserved weeks.