If you are looking into purchasing a vacation property such as a ski lodge or a condo unit near the beach, make sure you understand all the details. Remember that you are buying far from home and markets here are a lot different, an article from Huffington Post said.
First of all, most vacation home buyers are usually buying properties out of emotion and then "justify it with logic." If you are going to buy a property that costs a fortune which you will hardly use during the rest of the year, why don't you rent it out when you are not using it? You will be able to profit from huge rental fees when you are back home and then enjoy tax advantages with a rental property as well. Read about the tax rules and discuss this with your real estate agent.
There are certain limitations on your own use of your vacation property if you really want to take advantage of tax breaks. Consider this quote from the IRS website:
"If you rent a dwelling unit to others that you also use as a personal residence, limitations may apply to the rental expenses you can deduct. You are considered to use a dwelling unit as a personal residence if you use it for personal purposes during the tax year for more than the greater of: 14 days, or 10 percent of the total days you rent it to others at a fair rental price."
You also have the option of buying a vacation condo in a small town or from condo projects along the slopes. Most condo properties in town may not have management staffing or maintenance as opposed to projects near or around the slopes with full-time maintenance help. Usually an additional 35 percent to 45 percent fee of every dollar received in rental income is expected with maintained properties. But expect higher monthly or quarterly owner dues whether the unit is rented out or not.
Arming yourself with updated information on rental laws on vacation properties could help you maintain and profit out of your vacation home when you are at home.
