Tax benefits of renting your Red River property nightly

According to the IRS, if you rent your property 15 days or more per year, the property can be treated as a residential rental property. Rental properties, as with any other business are eligible to deduct certain expenses that relate to the operation and upkeep of the property. One of the major expenses that a lot of people don't realize is that depreciation can be written off. According to IRS publication 527 

" You begin to depreciate your rental property when you place it in service for the production of income. You stop depreciating it either when you have fully recovered your cost or other basis, or when you retire it from service, which ever happens first"

So, if you rent your property for 15 or more days a year, you have essentially converted it from a residence to a business, and therefor are eligible for certain tax exemptions that businesses enjoy.

The IRS rules in regards to residential rental property are not complicated, but I would highly suggest referring to the above publication or consulting with your tax preparer for more details. 

Some other expenses that you may be able to use as a deduction include, but are not limited to:

- Cleaning and Maintenance

- Insurance

- Mortgage Interest

- Property taxes

- Utilities

- Phone costs, PO Box, internet costs related to your rental property

- Building repairs

- Education

- Attorney, Accounting, and other professional fees

- Management Fees

- HOA Fees

- Insurance

Keep in mind that not all rental properties in Red River can be rented nightly. Red River has different zones where this is allowable. If you are interested in renting, let your Realtor know this before you begin your search.

Many properties in Red River have the potential of generating significant rental income. This income can significantly reduce the cost of ownership or even generate a profit. Many owners of homes, town houses and condos, rent their properties either themselves or through a property management company. Property Management companies charge anywhere between 40 and 60 percent depending upon the company and the services provided. Even with this additional expense, renting your property may be the way to go. Please feel free to contact me for more details.