Short Term Rental Business and Tax Strategy

Short Term Rental CPA and Investor that Help You Boost Your Income and Reduce Taxes

As a short-term rental CPA and investor, Bette appreciates the unique niche STRs play in the Tax Code and Investor Portfolio. They are semi-passive instruments, often with more hands-on work than traditional rentals but less than most businesses. Using OTAs (Online Travel Agents like Airbnb and VRBO) creates interesting tracking issues but opportunities to generate cash on cash returns that traditional real estate investors can only dream of. Special provisions in the tax code allow short-term rental investors to write off their losses against regular income, but only if done right.

Short Term Rental CPA Services

Financial and Tax Benefits

When actively managed, short-term rentals have tremendous business opportunities to generate superior cash returns. They are not hands-off like a traditional rental and have much higher expenses because of furnishing, maintenance, and service costs. A properly managed short-term rental will generate substantial rental income and expense write-offs. Bette Hochberger is a short-term rental CPA and investor, uniquely qualified to help you maximize your tax benefits as you grow your business.

Short-term rentals may benefit from cost segregation studies in a way traditional rentals do not. Short-term rentals generate larger cash profits and have a longer depreciation life; they may generate taxable income. Using cost segregation and bonus depreciation may enable you to realize losses earlier in your property’s life cycle, reducing or eliminating the taxable income. Further provisions in the tax code allow you to offset regular income with short-term rental losses based upon material participation without establishing yourself as a real estate professional, further benefiting your taxes. Everyone’s tax situation is unique, and the documentation and process for this require careful record-keeping.

Publication 925 (2022), Passive Activity and At-Risk Rules

Meticulous record keeping may seem challenging, but as an investor herself, Bette has developed systems to make it easier to track and work with your PMS or Property Management System. We can help you track your expenses, maximizes your deductions, and avoid common pitfalls that can limit your tax advantages from your investment. When you sell your properties to buy new ones, we can help you determine if a 1031 Exchange makes sense within your financial picture. If you are considering moving into other areas like commercial real estate, we can help you analyze how the cash flow will perform differently. A good short-term rental CPA knows these rules. Just like you want a real estate agent that invests in real estate, a CPA that is also a real estate investor has insights that other CPAs do not.

Short-term rental systems may have their own accounting and reporting tools. We can work with you to offload your back office to our firm, letting you focus on property acquisition, management, and guest experience. A combination of OTA marketing and outsource accounting services can make short-term rentals extremely advantageous and non-burdensome.