Tuesday, August 28, 2012

Income Producing Property

Have you ever heard the term OPM well, basically it stands for 'Other People's Money'. Effectively, having an income producing property is collecting OPM and that is why we've been looking to increase our portfolio with homes that have rental potential.
"More millionaires have been created by real estate investing then any other investment opportunity" according to Peter Giardini. He also writes an interesting article called 'Getting started in Real Estate, it's a good read and outlines the positives and negatives to owning income producing properties.

Tax Benefits of Vacation Homes

Personal v. rental use
The tax treatment of your vacation home depends on the number of days you rent it at fair market value and the number of personal use days. In addition to the days you use the home, you must count as personal use any part of a day that the residence is used for personal purposes by a relative and by any individual who rents the residence for less than fair market rent.
In addition, any day that your vacation home is used by your parents or grandparents, children or grandchildren, or siblings is counted as personal use – even if the family members paid fair market rent.
On the other hand, days you spend working on your vacation home are not counted as personal use days if they are primarily spent making repairs or getting the property ready for tenants. Bear in mind that for tax purposes, a second home can be a boat or even recreational vehicle as long as it has permanent sleeping, cooking, and toilet facilities.
Scenario #1: Use often, rent seldom
If you rent your home for less than 15 days during the year, any rental income you collect is tax-free. You don’t even have to report the income on your tax return. You can still deduct property taxes and mortgage interest whether or not the property is used to produce income. However, you cannot deduct any rental-related expenses.
Scenario #2: Use seldom, rent often
If your personal use of your vacation home doesn’t exceed 14 days a tax year or 10 percent of the total number of days it is rented out at fair market value, whichever is greater, your vacation home qualifies as a rental property. As the owner of a rental property, you must report the entire rental income you receive. However, you may qualify to deduct expenses related to renting, such as depreciation, utilities, repairs, and property management fees.
If you end the year with a net profit from the rental income, you may deduct all your rental expenses. However, if you had a net loss, your deduction will be limited by the passive activity rule. A passive activity involves the conduct, trade or business in which you are not materially participating.
An exception applies if you actively participate in managing rental activities. In such cases, you can deduct up to $25,000 in rental losses against other non-passive income, such as wages. This deduction begins to phase out when your adjusted gross income (AGI) exceeds $100,000. The passive activity loss not used cannot be carried forward to future years.
Scenario #3: Use some and rent some
If you and your family personally use the place more than 14 days a year or, if greater 10 percent of the number of days it is rented to others at fair market value, your vacation home is treated as a residence.
You must report all rental income on your tax return and you may be able to deduct your rental expenses, but only up to the total amount of rental income.
You cannot use the excess rental expenses to offset income from other sources. You can, however, carry the excess expenses forward to the next year and treat them as rental expenses for the same property up to the amount of rental income for the year.
Work with a CPA
With proper planning and professional advice, you can maximize tax benefits and your personal enjoyment of your vacation home. A CPA can help you determine the best strategy.

Sunday, August 19, 2012

Dobbs Mill

Here's a cute little story...

Earlier in 2012 when we were deciding we didn't want to stay in Washington we looked at the possibility of moving...Our favorite state in Massachusetts and one of our most favourite cities is Boston.

So, we planned a trip, booked our tickets and waited in anticipation of our trip.

We looked at the best small towns in Massachusetts to live that feel like 'home' with it's New England charm and 'How do you do' neighborhoods.

It reminded us of a movie that we love called Housesitter...Starring Steve Martin and Goldie Hawn. The House in the movie was built in Cohasset that was fictionally named Dobs Mill...Cohasset is also where Witches of Eastwick was filmed.

Anyhow, we both love Steve Martin movies and Cory brought home Father of The Bride I & II which resonated with our lives, getting engaged and moving to Boston! Haha

Anyways, while house hunting on The Cape we found a house on 45 Newton Street...Newton was Steve Martin's character on Housesitter and the cross street is Maple Avenue, like the address on Father of The Bride...

We chuckled, at the similarities and came up with a name for the house...Dobbs Mill. So, if that's the one, ya never know...It might just be.

Or am I jinxing it???

The Alfred Stevens Carriage House

This would be a wonderful rental opportunity on The Cape

Friday, August 17, 2012

52 Stevens Street

52 Stevens St, Hyannis, MA 02601

This $195,000 3 bedroom 2 bathroom home has a 2 car garage and rental potential.

Thursday, August 16, 2012

Wing Neck Lighthouse

As I was looking for rentals for our wedding I came accross Wing Neck Light House which can be rented for a modest $4,500 a week in the peak season.

 Photos above from www.wingnecklighthouse.com

Emily & Matt's Wedding featured on Snippet & Ink


Chantal & James on Studio 280

House Rentals on The Cape

I've mentioned before that we hope to get married on The Cape. One possibility was Heron House and Inn on The Beach. But we've decided to look for other locations also.

East Sandwich house rental - The Nautilus House of Cape Code
East Sandwich house rental - The Nautilus House of Cape Code

This home is in East Sandwich would be around $4,900 to rent for the week but it has an nice private beach.

East Sandwich house rental - Bella Mare Beach House ~ Surrounded By The Sea!

Another East Sandwich home. A little pricey at $5,900 but again a nice private beach.

East Sandwich house rental - Awesome View From Deck

See what I mean...

Provincetown house rental - Front of house

This home is pricey at $9,950 but has a lovely deck and pergola in Provincetown.

Provincetown house rental

It looks lovely in the sunset.

Bourne house rental - Recently constructed home sits on 1 acre

Bourne house rental - View of property from the Cape Cod Canal

This home is a statement, huh? It's in the Historic Gray Gables in Bourne and on the site where Grover Cleveland had his summer White House.

For a modest $5000 a week.

East Sandwich house rental - Front of house from the roadside

Again in East Sandwich, right on the beach for $5,200 a week...this home is immaculately furnished.

An lastly

Pocasset house rental - exterior

Pocasset house rental - front door

A lighthouse in Pocasset for $4,500 a week.

I did a bunch of research on the lighthouse because we both thought it was an idyllic location...I'll do another post on that.

Monday, August 13, 2012

Taylor Swift buys a home in Cape Cod

We're neighbours! Taylor Swift has reportedly bought herself this luxury vacation home in the Kennedy Compound in Hyannis Port

They're that close: Taylor Swift is said to be considering buying a home within the Kennedy Compound
Private beach: The house includes access to a secluded spot, and overlooks Nantucket Sound


In October several news articles have said she was only renting the home. It was actually purchased by a wealthy New York hedge fund guy.

We'll see...
*Update via Hooked on Houses*
Last summer I told you about the house in Hyannis Port Taylor Swift bought when she was dating a Kennedy. But then the Cape Cod Times reported that someone else bought it instead. So imagine my surprise when the news came out this week that she did in fact buy it last year after all–and just sold it again at a million-dollar profit.
You always have to be a little skeptical about celeb news, but E! Online reports: “Despite being coy in Vanity Fair about buying the Hyannis Port, Mass., house near the Kennedy compound while dating Conor Kennedy last summer, realtor Bob Kinlin tells E! News that he did in fact sell the house to Swift.”
“Kinlin told E! that the young singer snagged the Cape Cod style, 7 bedroom home for $4.8 million” through an LLC registered under someone else’s name. He says she made some improvements to the house, like renovating the formerly pink kitchen.

She broke up with Conor last year and sold the property recently, “making almost $1 million in profit after having the home for only seven months. The home sold for $5,675,000 to a couple that had been coveting the house before Swift.”


Saturday, August 11, 2012

Where to stay

Ideas of where to stay when we visit The Cape

Rodeway Inn Boston Logan Airport (1st, 5th, 6th, 7th) $378 for the last 3 nights.
Free shuttle to the airport and back!

Americas Best Value Inn & Suites/Hyannis (2nd, 3rd, 4th) $227 for 3 nights.
This hotel has a kitchenette, so we plan on cooking some meals, instead of eating out everyday.

Hire Car

139 Old Stage Road

A charmer in Centerville for $309,900

Classic Village Property. This Could Be A Wonderful Family Compound. Main House Offers 4 Bedrooms and 2 Baths. A 2 Bedroom Cottage and 2 Car Garage Complete This Idylic Setting. Minutes To 4 Seas Ice Cream, The Country Store and Craigville Beach. This Unique Situation Does Need A Little TLC.

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