Category Archives: Mortgage Rates and Updates

View information on Myrtle Beach mortgage rates and programs available through different lenders in our area.

Tax Benefits of Owning a Vacation Rental Property

Tax Benefits of Owning a Vacation Rental Property

Tax Benefits of Owning a Vacation Rental Property

Many families enjoy a yearly trip to a favorite ski resort or coastal paradise, and this leads to the eventual thought of whether or not it would be a smart investment to purchase a vacation property instead of renting each year. If you are considering the possibility of buying a second home or vacation rental, then it is important to understand the tax benefits of owning a vacation rental property.

Much of the taxes that you can deduct on your vacation home depend on the amount of time that you spend at the property for personal use. As a standard, property taxes and mortgage interest can be deducted on up to two homes totaling $1 million in mortgage debt. This is allowed whether or not you actually rent out the condo or home when you are not using it yourself, so you are guaranteed a tax break no matter how you use your vacation property.

From there, the tax rules become a little more complex, which is why speaking with your accountant to verify your personal tax situation and understand the exact ramifications for your personal time at the property is so important. Let’s take a quick look at some of the different options for tax deductions when you rent out your vacation property, so you can have a general idea of what to expect.

3 Tax Scenarios for Vacation Rental Homes

First, homeowners that spend a good deal of time at their vacation home (over 14 days) and rent it out a good portion as well (over 14 days) can deduct some of their utilities, maintenance, operating costs, HOA fees, insurance, and depreciation for that rental period. In this scenario the home has a time period where it is considered a private residence and a timeframe where it is treated as rental unit. The extra deductions can help you offset the rental income you have made up to the point where you zero out the income with tax deductions.

Second, a vacation rental investor who stays in the home less than 14 days or 10% of the rental period, whichever is greater, can treat the vacation home as a rental property. This allows the investor to deduct a far larger percentage of the utilities, maintenance, HOA dues, insurance, depreciation, and operating costs based off of the total days the home was used. In addition, if the rental income does not completely cover the cost of the rental timeframe, you might be eligible to write off up to $25,000 in rental losses. This is strictly for individuals who show an adjusted gross income of under $100,000 and gets progressively lower as the income approaches $150,000 and is phased out completely.

Third, property owners who rent their vacation home less than 15 days of each year do not have to pay any taxes whatsoever on the rental income. So, if you have the good fortune to have a vacation property or second home in an area with a big yearly event and you can rent it out for two weeks or less at a high rate, then you have the benefit of enjoying that income completely tax free.

Now that you have an idea of the many tax benefits associated with owning a vacation rental property, it is important that you speak with your accountant to confirm exactly what type of rental owner you are and how that might earn you even greater tax deductions from your second home.

Preston Guyton is a professional Realtor? serving the Myrtle Beach real estate market. For more information on Myrtle Beach homes, contact Preston today or visit


Leave a comment

Filed under GardenCityRealEstate, Mortgage Rates and Updates, MyrtleBeachRealEstate, Vacation Rental Property

Tips In Real Estate – Short Sales Explained

Real Estate Tips

Real Estate Tips

One thing that buyers may come across in their search for a new home is the short sale. A short sale is a situation where the previous mortgage home owners have been foreclosed on and now the financial lender is looking to cut their losses and sell the home quickly and usually for less than it is worth. Basically you are trying to turn a bad situation into something that all sides can be happy with.

Arranging a short sale can be complex thing usually involving a lot of negotiation with the lender. You will be working with a certain department of the bank that’s sole purpose is to deal with loans that have gone into default. In a short sale you will have to convince the bank that there is not enough equity in the property for the current owners to get out of their debt and that their best course of action is to sell the home and cut their losses.

The bank has already taken their chance and lost out of not only the interest that they would be collecting but the property now becomes a drain on them costing them money every day that they possess the property. This is where the smart investor comes in and offers to take the property off their hands so that they can get on with business. In this kind of investment more than any other in real estate, an investor needs to know their business. Dealing with banks and lenders when THEIR profits are concerned is quite different than applying for a loan. You are now talking about their money and as such you have entered a completely different world.

In their ideal situation the original owner would be able to find a way to pay them the owed mortgage and get back onto their payment schedule, allowing the bank to start making money off the property again. Once this possibility is ruled out it then becomes a matter of the bank trying to recoup their losses and if you can make them an offer that makes sense to both you and them then you may just be able to arrange yourself a great deal on a home for less than what it is worth. This kind of property is tailor made for a home flipping situation as with time on your side, you should be able to fix up and resell the home for an excellent profit.

Preston Guyton is a professional Realtor® serving the Myrtle Beach real estate market. For more information on Myrtle Beach homes & properties, contact Preston today or visit

Leave a comment

Filed under Mortgage Rates and Updates, MyrtleBeachRealEstate