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Invest in Fort Lauderdale Commercial or Residential
You know how it goes, you visit a place once, then suddenly you're spending half a million dollars on a vacation home to add to your arsenal of income streams. But it’s not always easy, and there are a few things that you should know before you dive deep into starting a vacation rental business.
Today,
Antonio
Ortega of Global Luxury Realty, LLC offers a bit of practical
information to help you make the most of your investment.
Investing Options and Considerations
In
the world of real estate investments, you have many options. Some people choose
rental properties, which are essentially single or multi-family homes that
people rent and live in for months or more. You might also choose to fix and
flip properties for a one-time profit. A real estate investment trust is
another option, but these are usually low buy-in and low returns. Investing in
vacation properties is a great alternative if you want to both generate an
income and have an essentially free place to vacation when you want to get
away.
You can also do Airbnb, VRBO short term rentals where permitted and hire a property management company to handle everything for you.
Cost of Ownership
There
are many costs that go into a vacation rental. The first is the cost of the
home, which can be as little as $500,000 to several million dollars or more,
depending on where you plan to buy. Like your primary
residence, you’ll also have taxes, insurance, maintenance, and more. However,
unlike the place you call home, you may also need to pay for a vacation rental
service.
Information Videos on Real Estate for the Fort Lauderdale Broward FL
There Are Highs and Lows
If
you’ve ever been on a vacation during “peak” season, you already know that some
times are busier than others. Although, as the Fort Lauderdale Stays blog
smartly points out, spring and
fall might have the best weather, as these avoid the storms of summer and the
mild (meaning fewer water days) temperatures of winter. Plan your rental rates
accordingly. You can charge more in the summer but reduce your fees during the
winter. You may only be able to rent it out enough to pay the mortgage, and
that’s okay because your big money-maker days are ahead.
You Have to Know the Laws
The
IRS looks at vacation rentals it’s up to you to
know how your property is classified. It’s likely, however, that your vacation
property will be considered a business, and that means you may deduct up to
$25,000 each year in losses. If you don’t rent your home much the first year
while you’re getting it ready, it may still be considered a personal residence. Consult your CPA and talk with your mortgage advisor about your plans beforehand so that you get the
right mortgage from the start.
More
than 13 million people visit the Fort Lauderdale area every year.
That’s 13 million potential customers in both the up and down seasons. This
alone is a compelling reason to consider investing in a luxury rental property.
Before you get started, know your options, estimate your returns and costs, and
understand how the IRS will look at your vacation home. Then, call your realtor
and mortgage broker so that you can get started on the fun part: the home
search.
Thank you for the trust placed in me,
Antonio Ortega LLC
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