Quote:
Originally Posted by MNViking
That is interesting to me, I need to learn more about this, as I have not heard of this but kinda the information I am seeking outside of the norm. Items I don't know, I didn't even know about lol!
So example, correct me if I'm am wrong. Just using the 300K number.
You put enough down, assuming to not pay PMI. So 20% down you paid $60k
$300,000
-$60,000
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$240K (Give or take closing etc rolled in)
Then 60 days later, you dropped $120k into an early payment (should hit principal), then maintain the same monthly payments, but your saving interest dollars and overall dollars based on less interest being accrued on principal. Do I have that correct? (Monthly spending is higher due to monthly mortgage, but savings come from long-term interest accrual being decreased.)
Is my rudimentary response correct? I also cannot take the interest off of the mortgage as it is a second home for tax purposes. I read the fed taxes and it states you can, but didn't dive in totally on the tax rules as there was a maybe in there.
I would only offer it up just to have someone in there on days not there, not necessarily for income. However, it never hurts to have someone pay towards your mortgage in your absence.
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Second home deductible expenses:
Tax Breaks for Second-Home Owners
So sounds like a bit of financial education is needed, to which I would recommend a CFP or at least a CPA for how the tax benefits work. book an hour with a CPA and ask him to explain how it works. $200 well spent. Also know what your break even days rented is. The reason for that is that there are vastly different rates depending upon the high season and the low season. So if you set rates, be sure that you calculate your days rented to break even, and for a year long, you know your break even point, versus the market rates. Again, that line item financial planning and market analysis goes along way to making a sound financial investment,
You can keep the house as a second home, rent it, pay taxes on the income, etc. however, you better be sure that you insure your house properly for renters.
There is the alternative putting the house into an LLC, which segregates the liability risks from personal to property only, at different levels of corporate ownership. If in a corporate structure, all expenses are deductible, and cash income is mostly shielded from taxes by deprecation deductibility, including all amenity fees, lawn care, CDD maintenance, etc.
If you furnish the house with a golf cart, know that florida does not limit liability to the driver, but includes the owner of the golf cart as well.
Note that a home watch will be key, as air conditioners break, stupid plastic push pull valves break, water connections leak, heavy wind driven rain will find all the cracks and enter the house, garage door codes get duplicated, and be sure to understand the guest pass process and the renter pass process.
Just approach your trip for education, and start with the assumption that your prior rental ownership experience doesn't apply.
good luck