10 Money Savings Tips for Vacation Rental Home Owners


  1. Tax law allows personal itemized income tax deductions on second/vacation homes for mortgage interest and property taxes even if they are not rented.
  2. Second/vacation homes qualify for capital gains tax rates when you sell if you have owned at least one year whether or not you rent.
  3. You may rent your second home fewer than 14 days annually without reporting income regardless of how much rent you receive during those 14 days, and still deduct the mortgage interest, property taxes and uninsured casualty losses as itemized personal deductions on Schedule A.
  4. You are permitted to deduct rental losses (subject to income limits and management requirements) if your annual personal use is either below 15 days or 10 percent of the rental days, whichever is greater.
  5. Business mileage for trips to your vacation rental home, as well as local business mileage, is deductible when you are doing repairs or “materially managing” your property.
  6. Unlimited usage is permitted without sacrificing your tax loss deduction when you are doing repairs or maintenance, but be sure to save your documentation.
  7. Under the right circumstances, rental homes may be acquired or relinquished in a Code Section 1031 Like Kind Exchange for other investment property while deferring all tax liability.
  8. You may buy rental property through your IRA with the help of a suitable custodian and the use of cash or non-recourse debt.
  9. Under current laws, proper planning often results in elimination of all tax liability for homeowners willing to invest in the time and lifestyle changes required.
  10. You may be able to double the net income from your vacation rental home if you learn to manage your vacation rental using the internet.