Tax Benefits of Owning a Vacation Rental

ISLAMORADA, Fla. - Dec. 18, 2017 - PRLog -- Per Jan Keller, Top Producing Real Estate Agent for Coldwell Banker Schmitt Real estate and owner of Kellerporterteam.com-Everything about Real Estate in Islamorada and the Upper Keys,"The tax benefits of owning a vacation rental make it a better asset. If you play your cards right, you can enjoy it more and earn a healthy return on investment. While providing a place to escape and unwind, a vacation rental also serves as a place to create lifetime memories. But, it gets even better when you factor in its tax advantages. Here are some of the most compelling tax benefits of owning a vacation rental property:

●      Deduct mortgage interest. This is a popular write off for homeowners and it likewise applies to your rental home. (That is, up to a total of $1 million in home loan debt.) So, if both homes have a total of less than $1 million, you can take the mortgage interest deduction on both residences. That's certainly a good amount of savings to enjoy.

●      Home improvements and repairs. No house is perfect. And, there are always projects to provide a little more function and/or creature comfort. You can deduct home equity loan and credit line interest. So, if your vacation rental is a fixer upper or just needs some TLC here and there, you can write those expenses off. However, the IRS does set some limitations on these. Make sure to consult an experienced, professional tax adviser before you begin to swing the hammer.

●      Property taxes. You have to pay property taxes on your primary residence and your vacation rental. But, you can also write off your second house's property taxes. What's more, unlike the mortgage interest deduction, there's no limit.

●      Rental income. The great thing about owning a second home is that you can always escape to your other property when desired. But, why not earn a little income off of it when you're at your primary residence? If you rent for 14 days or less per year, you'll pay zero in income taxes. However, if you rent it for more than 14 days, you're going to do more math when it comes to tax time.

For more information about Luxury Homes for sale in the Upper Florida Keys, please contact Jan at http://www.islamoradajan.com