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Investment Opportunities and Tax Advantages in Owning a Vacation Home Rental in the Keys
The Keys are a great place to work and play. But this chain of islands off the coast of Florida situated between the Atlantic Ocean and the Gulf of Mexico also has hidden potential. And that comes in the form of investment opportunity.
By: Barbara A. Anderson Realty
When people think of the Florida Keys, they think of sunshine, beaches, sparkling water, and balmy breezes drifting about day and night. They think about watching sunsets and sunrises, strolls along the coastline, a tropical lifestyle, casual dining, and mouthwatering seafood. But there's a lot more to the Keys.
Because the Florida Keys are an international tourism destination, there are certainly a lot of recreational opportunities. And that makes for an environment that is ripe for real estate investment. The abundance of tourism means people need a place to stay during their visit and those who are looking for a great opportunity ought to take notice. Now, it's a matter of sorting through all the available real estate properties on the market. In general, it's best to look for properties that are near the water and in close proximity to living amenities such as dining, entertainment, and shopping. Although these properties will be more expensive, they will command higher rents and be in higher demand for travelers. Tax Advantages of Owning a Vacation Rental Home
Getting down to the financial benefits of owning a vacation rental home, there's more than just taking in rent payments. There's the benefit of certain deductions and if you make use of the property in the right way, it can be a great source of income. Here are a few things you should know: Rent seldom and reap the benefits. Rent your vacation home in the Florida Keys for less than 15 days in a year, and all that rental income is tax-free, according to the California Society of CPAs.
Rent more, deduct more. If less than ten percent or two weeks of the year isn't realistic for your situation, then take the deductions. Your tax bill can be lowered by claiming certain deductions. Costs for storage, maintenance, and other things like travel and insurance can be written off in part or as a whole.
Mix up the use. Stay in your vacation rental home in the Keys for ten percent of the time and claim it as a second home but not as an actual business property. That has benefits as well.
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