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Any Property Management recs in Seattle area? :(
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Mentor
You are leaving money in the table but you are also avoiding big potential headaches.
Yup. /endthread
100% leaving cash on table based on my personal experience. I bought my 2nd home without any affordability issue. Then one day I happen to put it on Short term rental platform and I was blown away by the demand. I scrambled my way to get cleaners, maintenance guys lined up and tbh, I personally oversaw the first 2-3 turnovers myself - greeting each guest, checking upon the cleaners etc. Question is - Was it worth it?
Not on its face value. But here’s the little secret -
I learnt that I am more than able to offset my mortgage and expenses and leave cashflow on top by doing so. Still, it wasn’t enough motivation. Then I found, I could take accelerated depreciation and bonus deprecation on the property, and use the Short term rental loophole to offset my ENTIRE W2 income, thereby paying less than 5% effective federal tax. And all of this without being a Real estate professional (that’s part of this loophole, you don’t need to be one).
OMG - that opened up the game for me. Simply by taking the federal returns, i was able to put that as Downpayment on the next vacation rental, rinse , and repeat it for offsetting next years return. I am into my 5th year doing this, now own 6 2nd homes that are short term rentals. They are in 6 different states and I can enjoy them whenever I want.
Happy to chat offline if you have any questions. Heck, I will offer to set it up and run for you as a joint venture if you like (and pass on the depreciation benefits)
Coach
Sending you a DM, you've piqued my interest
Subject Expert
How much are your headaches worth?
Depending on where your rental is, you could be making $1k to $3k per month for peak season. Maybe it doesn’t make sense during the off season, but my headaches with my vacation rental that I rent out when I’m not there aren’t $1k to $3k at a time. They’re an occasional hour or two of coordinating contractors / vendors, and/or a few hundred bucks here and there.
There’s also some tax savings potential through not just depreciation and expenses, but also bonus depreciation that you could be losing out on. Combined with the income you are forgoing, there could be $20k to $30k in missed opportunity available…. Or even more depending on the property and the market.
I tried Airbnb and had a few very bad experiences at my lake house.
My advice - google a locally owned vacation rental company (not a national platform). They'll handle all the guest interactions and facilitate cleaning, turnovers and maintenance type things. You'll pay a little more for the management, but its been so worth it to take the stress of those things off my plate. I don't have time to deal with that and now every time we get to the house for our own use its always clean and ready for us