Tax Breaks for the Under $100K Owner

Do you know all the tax breaks open to a second-home owner? Real estate writer Bob Bruss points out that" if you materially participate in managing your second-home rental and if your 2006 adjusted gross income is $100,000 or less, then you can deduct up to $25,000 of second-home tax loss from your other ordinary taxable income." So what's "material participation?" It includes setting standards for tenants, establishing the rent and approving tenants, even if the day-to-day management is left to others.

Slower Market? Buy! Says Expert

"Because houses aren't flying off the shelf, there's less pressure on you to make a quick decision" about that second home you've always wanted. "You can afford to take your time, do your research, and refine your plan," says Christine Karpinski, director of Owner Community for HomeAway.com and author of two books on the subject, including Profit from Your Vacation Home Dream: The Complete Guide to a Savvy Financial and Emotional Investment. In addition, "when your monthly mortgage payment is less than or equal to one peak week rental, twelve weeks of rental will cover your mortgage payments for the entire year," she says.

More Park City News: Leaf-peep With Stein

Count on rental income? Some managing companies are better than others in promoting "off-season" packages. Example: Stein Eriksen Lodge in Deer Valley, Park City's high-end neighborhood.

From Oct.15 through Nov. 21, the ski legend's lodge (which includes many condos) offers a "Fall getaway" where guests "enjoy unsurpassed luxury and brilliant foliage," according to a press Release. One-BR suite + 3-course dinner= $99/per person. That kind of rate can boost owners' bottom line during traditionally slow times of year.

A "Must-Have" For Second Home Rentals

Everybody in the tub! An expert in Hawaii rentals says the must-have amenity for a second home toget more rentals is a hot tub. That's the word via Inman News from Bill May, whose company owns and maintains more than 100 resort and rental properties in Hawaii and the mainland. "It's a four-season amenity.... It would probably pay for itself three times over in less than a year," Says May.

Selling Your Vacation Home a Month at a Time

You know the market is slowing when articles start appearing about seller financing. Nevertheless, becoming your own mortgage company does bring in money on a place that you're no longer using. Here's what Inman News says: "If you no longer choose to nurse a rental or vacation cabin and want to sell it, you can spread any resulting capital gains tax over time by 'playing the back' and providing seller financing. And, you can save the new buyer, perhaps a young family that has shown interest in your getaway community, the costs of a conventional loan while negotiating a favorable interest rate for both sides."

Your Best Market Cohort is 78 Million Strong

Brokers please note: In case you didn't know this before, boomers are house-crazy.

The latest Harris Interactive survey shows that 25 percent of boomers own one or more other kinds of real estate in addition to a primary residence: 13 percent own land; 8 percent own rental property; 7 percent, a vacation home or seasonally occupied property; 2 percent, commercial real estate; and 3 percent, some other kind of real estate.

Why Is A New Web Site News?

A lot of media outlets have picked up a press release trumpeting HomeAway.com, a site that allows visitors to search more than 60,000 homes across 90 countries. Why is that hot news? It isn't really, except for the fact that HomeAway unites several leading sites where vacation rentals can be found both within the U.S. and abroad, including CyberRentals.com, which boasts 20,000 listings all by itself.

Warning: Buying Investment Property May be Addictive

According to the National Association of Realtors, 35 percent "of all investment-home owners said they were planning to buy another home within two years. For those who currently own four or more investment units, 64 percent said they planned to buy another property within two years, and 17 percent said they planned to purchase five or more additional properties." Even though the air is leaking out of the housing bubble? I wonder. And what happens when interest rates hit 9 % or so?

Investor Frenzy Could Boost Apartment Rentals

With home prices out of sight (and reach) in many areas, this will be the year that the apartment market surges, says real estate consultant John Burns. Why? Here are factors he cites:

Mortgage Rates - Falling mortgage rates over the last 6 years have created a tremendous boom in for-sale housing.

Lack of Construction - Apartment developers became condo developers because it made more financial sense.

Condo Conversions - Condo conversions also took apartment units out of the market.

Rising Homeownership - With investors renting them so many homes they have bought lately, the nation's rental stock has dwindled.

Burns also thinks fast pace of condo conversions means market could become flooded and those condos will land with a thud in the rental market.

Top Picks for Second-Home Investment Cities

Here's Bankrate's forecast of 10 cities where prices and values should continue to rise. Hint: not one is in Florida or Nevada.

How to Survive Being a Landlord

I always pay attention when columnist Bob Bruss recommends a book. Lately, he's raving about The Landlord's Survival Guide, by Jeffrey Taylor. "If you own residential rental property, or are thinking about investing in rentals, you will benefit" from it, says Bruss. "Known among residential rental owners as 'Mr. Landlord,' Taylor has created a business of helping landlords prevent costly management mistakes." Bruss says this book is geared to novices and/or part-timers.

You Collect Rent, Someone Else Cleans Toilets

Here's a no-brainer: If your ideal getaway home includes maid service, a spa and beach club, and you want it to generate rental income without dealing personally with checking in guests and fixing overflowing toilets, consider buying a room or suite in a luxury hotel. Condo hotels make up 3 % of U.S. hotel room inventory, yet account for nearly 13 % of the 100,452 hotel rooms under construction nationwide in December 2005, according to Smith Travel Research.

For more infor, read ThirdAge's Buy a Dream, Then Rent It Out

Landlording Can Mean 3 am Phone Calls

"Landlording is no day at the beach," warns Lew Sichelman of MarketWatch to prospective vacation-home investors. "Are you ready to respond to a 3 a.m. phone call from a tenant whose water heater has sprung a leak? Do you have the mental toughness to toss a nonpaying tenant when she's crying crocodile tears on the courthouse steps? "

Last-Minute Rentals? No Problem

"This year, last-minute renters are in luck. You need not be banished to unfashionable parts of the Hamptons, the farthest reaches of New England or less-than-pristine lakes in the Midwest. You're beneficiaries of changing American vacation habits, says the latest issue of Forbes. Of course, the news isn't all (ahem) sunny. While real estate prices have shot up, rental prices have, for the most part, held steady from Cape Cod to Lake Tahoe.

Florida: Renting Hotel Room While Hunting

"Retirees moving to Florida are living in hotels for weeks and even months at a time as they scour the state in search of affordable places to live." -- from Christian Science Monitor article yesterday.

Breaking News! Speculation Risky!

"It's true that some people have made fast profits [in buying homes and condos recently], but it's not to be expected," NAR President Al Mansell, CEO of Coldwell Banker Residential Brokerage in Salt Lake City, said recently. In fact, it can be risky, and prospective buyers need to be aware of the facts before they think about jumping in."

If Only He Had Bought, Not Rented

A hungry burglar who targeted empty vacation homes is now behind bars. According to detectives in Brunswick County, NC, 22-year-old Jason Warren Poindexter was arrested last Thursday after he broke into vacation rentals in the Holden Beach area, ate the food in the cupboards and ran up the utility bill.

Beware of Greedy Rental Agencies

Noted real estate columnist Robert Bruss tells a cautionary tale of mismanagement of vacation homes in a recent column headlined Did rental agency cheat vacation homeowners?

He cites a case in which the manager of a rental agency apprently took advantage of absentee owners by collecting money on short-term rentals and pocketing it.

If you're renting out a vacation home, how do you stop this kind of greed? Two logical answers: do your due diligence before signing up with an agency, and read all the fine print.

But I hope Bruss offers his own suggestions in a followup column.

New Web Site Rents Vacation Homes

Hotels.com has launched a companion, vacationSpot.com, calling it the first Web site enabling consumers to book instantly thousands of vacation rental properties, including condominiums, suites, villas, and vacation homes, located in the most popular destinations around the globe.

Looking for such a rental? Here's an incentive to click now -- VacationSpot.com is giving away 100 weeklong vacation rental stays during its first 100 days, meaning through the end of April.

Southern Utah Ski Property: Investment Potential

Am I focused on second homes in the Rocky Mountain states? You bet. All indications are that this is where the greatest potential for growth (and profits, if you are an investor) lies. For example, here's news about an entire ski resort for sale in southern Utah, a key destination for retiring Californians who are cashing out in their home state and putting down roots in the interior.