Two Things to Consider When Renting Out Your Vacation Home

By
Mortgage and Lending with EstaR Mortgage NMLS #241125

Two Things to Consider When Renting Out Your Vacation Home

 

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1 - IRS Guidelines: How Many Days Are You Using the Home for "Personal Use"?

In order to deduct the mortgage interest on your vacation home as "qualified home mortgage interest", you need to use the vacation home for your own "personal use" for the greater of:

  • 14 Days per Year; or
  • 10% of the number of days that you rent it out for fair market value

For example, if you rent out the home for 100 days per year, you'd need to live there for at least 14 days per year. On the other hand, if you rent out the home for 200 days per year, you'd need to live there for at least 20 days per year.  Keep in mind that "personal use" includes use by your immediate family including your spouse, brothers and sisters, half-brothers and half-sisters, ancestors (parents, grandparents, etc.), and lineal descendants (children, grandchildren, etc.).

2 - Lending Guidelines: Do You Have Control of the Property?

You may still be able to treat the property as a second home for mortgage approval purposes if you rent it out for part of the year. In this case, conventional lending guidelines require that:

  • You must occupy the property for some portion of the year;
  • You must have exclusive control over the property; and,
  • The property cannot be subject to any agreements that give a management firm control over the occupancy of the property.




Of course, there may be other rules to consider.  Contact me for more information.

PLEASE NOTE: THIS ARTICLE AND OVERVIEW IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSTITUTE LEGAL, TAX, OR FINANCIAL ADVICE. PLEASE CONSULT WITH A QUALIFIED FINANCIAL OR TAX ADVISOR FOR SPECIFIC ADVICE PERTAINING TO YOUR SITUATION.

 

Chris Freck MBA CMPS
Chris Freck MBA CMPS
Broker
NMLS: 241125
EstaR Mortgage
MyLender@EstaRM.info

(510) 463-1003

2413 Webb Avenue, Suite E,
Alameda, California 94501
Corporate NMLS: 1547521
Mutzig Management, Inc dba EstaR mortgage is California Bureau of Real Estate license #2020370. Christopher A. Freck, California BRE license #1454795 with an MLO Endorsement. 

Comments (1)

Chris Freck
EstaR Mortgage - Alameda, CA
EstaR Mortgage, A Bilingual Brokerage

For more information we can be reached at 510-463-1003, MyLender@EstaRM.info or https://EstaRmortgage.com Thank you!

Aug 29, 2018 02:30 AM