ROI, or return on investment, is a performance measure used to evaluate the efficiency of an investment or compare the efficiency of a number of different investments. Often referred to vacation homes or rentals, ROI includes deducting expenses, mortgage interest, and property taxes, which is ideal if you limit personal use of the vacation home to 14 days per year or about 10% of the time the home was rented, whichever is greater. If you're considering buying a vacation rental or home throughout Palm Beach County or anywhere in Florida, there are several ways to boost your rate of return.
#1. Donate time at the rental in a charity auction.
You can donate the use of your home to a charity event and both the bitter who wins the auction and the vacation rental owner can take a charitable deduction for any amount that is greater than the personal benefit made. This means that if your home gets auctioned off in a charity auction for, let's say, $7500, but the market value is $5000, you would be able to deduct $2500 on your taxes.
#2. Donate the property to charity when you're done with it.
Rather than just a one-time vacation use donation, if you're not interested in keeping the home and you want to lower your tax bill, you can donate it to a qualified charity and deduct the fair market value of the property based on an appraisal. This may or may not be more beneficial than selling it outright so it's important to run all the numbers.
#3. Consider renting to an organization rather than an individual.
Many organizations, churches, or even nonprofits will use homes for retreats, getaways, or you can consider leasing your home to recovery industry organizations as an ultra stick opportunity. You can deduct the typical rental fee on your taxes.
#4. Use it for business.
If the business owns the property, you can use the house as a reward or a retreat for clients and employees. The amount received should be reported on the employees year on the tax form and would be subject to employment taxes but it can be deductible for you if the business owns the property.
#5. Consider furnishing it.
You can get a higher rental rate with the right decorations. My furnishing the home you can deduct a lot of the purchases and by going with a gray, white, or black color scheme, you can attract high and renters as well.
#6. Share the property with friends and family.
When you're not using the vacation property you can invite friends and family to share costs by offering them to buy a part of the investment or rent it to them at a daily rate for the cost of some of the expenses.
If you're considering a vacation property in Palm Beach Gardens, Jupiter, or anywhere in Palm Beach County, contact me today to receive a list of all properties that would be ideal and offer a great rate of return on your investment