If you want to qualify for the STR tax loophole before December 31, you need a plan for your material participation hours.
One approach we’ve seen work is setting aside a full week to get the property ready.
That can include:
• Setting up furniture
• Preparing the property for guests
• Creating a guest guide
• Improving the guest experience
• Self-managing the property
• Getting the property available for rent before year-end
You also need to pay attention to the “more than anyone else” part of the test.
That is why a major rehab at the end of the year may work against you if a contractor ends up putting in more hours than you.
A smaller setup now, followed by a larger rehab in January, may make more sense depending on your situation.
The key is to plan before you close, not after.
#ShortTermRental #STRInvesting #RealEstateTaxStrategy #MaterialParticipation #RealEstateInvesting
One approach we’ve seen work is setting aside a full week to get the property ready.
That can include:
• Setting up furniture
• Preparing the property for guests
• Creating a guest guide
• Improving the guest experience
• Self-managing the property
• Getting the property available for rent before year-end
You also need to pay attention to the “more than anyone else” part of the test.
That is why a major rehab at the end of the year may work against you if a contractor ends up putting in more hours than you.
A smaller setup now, followed by a larger rehab in January, may make more sense depending on your situation.
The key is to plan before you close, not after.
#ShortTermRental #STRInvesting #RealEstateTaxStrategy #MaterialParticipation #RealEstateInvesting