Selling Your Florida Vacation Home
Ask Yourself 4 important Questions first!
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Making those travel plans for the long awaited vacations we missed out on last year? With more and more people being vaccinated, you may feel a bit more confident about travel.
Some households are focusing their efforts on buying a vacation home rather than staying in a hotel.
It’s not surprising that there’s an increase in demand for vacation homes.
Covid has made most of us realize we prefer to be around small groups. Not only for safety, but for a renewed appreciation for those close relationships we might have taken for granted before.
A recent poll was taken asking what some of the biggest take-aways have been learned from social distancing.
76% of you said you rather have small family gatherings or hang with a few of your closest friends at their house or yours.
Vacation homes are being seen as a potentially more pandemic-friendly way to travel and socialize, and serve as an extended home-away-from-home.
With more Americans being given the option to continue working remotely or retire earlier than expected, vacation homes can be used year-round.
The demand for vacation homes has increased and will continue to rise as we head into summer.
If you own a house in a destination spot, like our Central Florida area here in Lakeland and have thought about selling, now is a great time to take advantage of today’s high buyer demand.
Before you sell, consult with a tax professional. There is a difference between selling a short term rental property and selling a second home. You may have to pay capital gains on the sale of your second home.
Not sure if you should sell your short term rental property? Ask yourself a few questions:
First, let’s define what constitutes a short term rental property.
“A Short Term Rental is a rental of a residential dwelling unit or accessory building for periods of less than 31 consecutive days.”
There 2 main types.
Owner-occupied: With this type of property, the owner has occupancy more than half the time and rents out the home throughout the rest of the year for up to 30 days per rental.
Non-owner-occupied: In this scenario, the owner does not live in the property and rents it out at least once a year for up to 30 days per rental.
Owning a vacation rental can be very lucrative and enjoyable, especially if enjoy coming to Florida during the winter months or having a seasonal rental income.
However, You may have come to a point in your life that these things don’t make sense for your personal situation any longer.....Ask yourself:
Have you reached the end of the property's life cycle?
Meaning, the reason why you purchased your short term rental property is no longer practical.
Maybe your kids are grown and you yourself are traveling more.
This may be a good time to sell.
Have your expenses out weighed your benefits?
This is a big reason why most people decide to sell their investments property.
Cash flow should be the primary driver of your selling decision.
If the income doesn’t cover your expenses, then it is a negative income property. That means you are feeding it, rather than it feeding you.
Do you have any big ticket repair items coming due?
The overall condition of the property should be one of the deciding factors to sell.
It’s wise to sell before some high dollar capital expenditures come due.. Like a new roof, A/C, New windows for example. Again we’re talking about your short term rental and not a second home.
Are you nearing retirement?
Everyone in the U.S. is keenly aware we’re in a hot sellers market.
So , If you’ve been waiting for the opportunity to get a better price for your short-term rental to pay off a mortgage or liquidate built-up equity ...This is the time!
So If you’ve answered YES to any of these questions, it may be time to sell your investment property.
Demand is High and Inventory is low especially in the Greater Lakeland areas, Making this THE OPPORTUNE time.
First, check with your tax professional to determine your best course of action. It may require you changing the status of your ownership, depending on your personal financial situation.
Then contact a local Real Estate propfessional to discuss your next steps.
I’m Lisa Kelly Lakeland Homes & Lifestyles with Premier Realty.
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