Owning and Living in Multiple Properties: 4 Things to Know

Imagine having a third or fourth home! Sounds fun, right? The memories you can create with your family living in different properties are out of this world. Who would not want this? 

You can even earn money from your homes by renting them out when you are not living in them. However, it is not always this rosy if you do not know a couple of things about owning and living in multiple homes. Here are things you should know.

Planning and Management

Just like you manage any other investment portfolio, you also need to plan and manage your homes. You can do this alone or hire a partner to help you with management. But before doing that, check with your family to see if they can help.

What about mailing services? Should you get a mailing address for each of your homes? Well, you do not have to worry about this since you can manage your mail anytime with a virtual mailbox. This means that you can use the same mailing address for your homes, no matter how far they are from each other.

There are many other things you need to take care of in your homes. For instance, what should you do when you have plumbing issues? Planning and management are very important when it comes to making sure that all your homes are in good condition even when you are not there.

Renting Out When Away

If you own multiple homes, you understand that you cannot live in all of them at the same time. So, instead of having some of your homes stay idle, you might decide to rent them out when you are not there. This can be a great source of income for you.

However, if this is something that you want to do, you need to be aware of taxes. For instance, renting out your home for not more than fifteen days means that you will not need to pay any taxes on the rental income.

This will not be the case if you rent out your homes for more than fourteen days. You will need to pay taxes on the rental income that you get. You, therefore, will need to take note of the number of days you used the particular home in question and the number of days you rented it out. This can affect your standing with IRS and mortgage partners.

Tax Planning and Property Taxes

You also need to plan your taxes and check on your property taxes if you own and live in multiple properties. One of the most important things to note is the fact that your mortgage interest can be deducted on your properties the same way you do with your primary home.

Did you know that the tax law allows you to write off up to one hundred percent of all the interest paid as long as it does not exceed one million in debt? This includes the mortgages on all your properties and any money that you spent improving the properties.

You also need to know about deductions on the property taxes of your homes. When deducting these taxes, you are not given a limit like the mortgage interest discussed above. These are things that can save you a lot of money and that you need to understand if you own multiple properties.

Seek Legal Assistance

Do you know how family law and real estate in the United States might be complex, especially if you do not have a background in the legal field? You should not take this as a DIY task the same way you handle some home improvement tasks.

You might want to keep all your homes and use them as a means of generating some income during your retirement. You might also want to keep them and pass them on to your children later in life. All these situations are not a walk in the park and you need to be prepared for any eventualities.

So, what do you need to know or do? Well, you can create a Family Limited Partnership or an LLC (Limited Liability Company) to handle all your properties. If you form an LLC, your family members will get equal interest in your homes. This will ensure that you have avoided disputes in the future even when you are not there.

You can have a lot of fun living in different properties and moving from one to another when you feel like it. However, you need to understand everything discussed in this article to ensure that you are on the safe side with the law and that your properties are safe.

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