How To Get The Most Out Of Your Vacation Home Financially

One of the great benefits of living in New England, especially Andover and North Andover, is our proximity to great vacation destinations.  From the beaches and our shoreline, to the mountains of Massachusetts, Vermont and New Hampshire, there are terrific opportunities to own and enjoy a vacation home.

If you have fallen into the category of a second-home owner who is having financial difficulty and trouble selling it, there are things that you can do to try and save money.

• Wait for rates to come down again and re-finance the loan.
• Hold off on any planned home improvements.
• Rent the property. You may rent your property for up to fourteen days before having to report the income to the I.R.S. This is a wonderful option if your property is near a popular annual event that brings in many out-of-towners needing places to stay for the event.
• Donate the home to charity. You can donate a week for a charity auction and then possibly deduct the fair market rental value from your income taxes. A home can be donated as a Life Estate, which gives the homeowner the right to live there until death and provides a large tax deduction.
• If you are ambitious you could hire a tax attorney and appeal your property taxes. Many property taxes were assessed on values at the peak of the market, and are now valued much lower.
• Write up a written agreement or family limited partnership to share the financial burden of the second home with a “partner”. This could be a family member, or not.

To earn more about possible tax advantages of second-home ownership go to Family Education.