Many new home buyers choose to buy Kissimmee holiday homes because these properties are in the heart of Orlando’s popular theme park area, making them attractive as a short-term rental investment. The uncertainty caused by the global pandemic may prompt some homeowners to consider selling their homes. Before you decide to sell, consider the following factors to ensure that you get the most out of your home’s sale while supporting your long-term investment goals.
When is the Right Time to Sell a Vacation Home?
Homeowners may want to take advantage of the increased value of their home and sell it to realize a profit. Others may want to take advantage of new developments and upgrade to a larger home.
Your vacation home may need significant repairs or renovations. But you may not want to invest in costly upgrades. Selling your home to buy a newer property can make financial sense.
If your primary residence has changed, traveling to your vacation home may not be as convenient as it used to be. Selling your vacation home may be the best option if you want to find one that’s closer to you.
What’s the Long-Term Cost of Keeping Your Vacation Home?
If you’re hesitant to sell your vacation home because you want to keep the property in your family for the future, consider its long-term costs. Ongoing maintenance and repairs are a necessity. This is especially important when using your home as a short-term rental property. If you want to attract guests willing to pay higher booking rates, your home will need to be properly maintained.
Think about current and future market conditions when deciding if you should sell your vacation home. Real estate markets fluctuate over time. It’s wise to consult a real estate broker who specializes in your vacation home’s area to determine if selling now will give you a higher return than waiting until a later date.
Know Your Tax Liabilities
When you sell a vacation home, the total profit is subject to taxation. When selling a primary residence, only the first $250,000 in profit per person won’t be taxed. A real estate professional can help you understand how factors like your tax bracket and the purchase price of your home can impact your tax liabilities when you sell.
Any expenses related to home improvements can reduce the taxes you’ll pay when selling your vacation home. Kissimmee holiday homes used as short-term rentals may have a higher depreciation rate due to wear and tear. This can also affect the profit you earn when selling your home.
If you are a foreign owner of a U.S. property, you will also have to deal with tax issues under the U.S. Foreign Investment in Real Property Tax Act, otherwise known as FIRPTA.
Team Donovan helps home investors buy and sell luxury vacation homes in Kissimmee and the surrounding Central Florida area. We can help you navigate the selling process and give you the resources you need to get the most out of your home’s sale. If you want to learn more, contact us at (407) 705-2616 and schedule your free consultation today.
Posted by Team Donovan on