Legal, Tax, and Insurance Information for Long Beach Island Rental Homeowners
The LBI real estate market has been experiencing a strong period of positive growth. The aftermath of Hurricane Sandy has created an environment in which many homes on Long Beach Island have been either renovated or rebuilt. The overall strength of the Long Beach Island real estate market has improved buyer confidence and both the number of sales in the average price of risen. In conjunction with this improvement in the LBI real estate market, we have been witnessing higher levels of summer rentals. With demand for vacation rentals high, many homeowners have been considering renting their homes to help generate income. There is important LBI real estate rental homeowner information that anyone considering become a landlord should be aware of.
LBI Real Estate Rental Homeowner Information
Let me begin by saying that I am a real estate agent, which means I got an attorney, an insurance agent, or a tax professional. Therefore, it is important to consult with the appropriate professionals to ensure you are receiving the best information for your specific case. That said, there are some generalizations that anyone considering the rental should be aware of. For example:
- Most rental income will be taxable
- It is important to have the appropriate insurance coverage is in place in the unfortunate event of an accident
- It may be advisable to put your home into an LLC or some other corporate form of ownership
For most, the income generated by a summer rental will be taxable income. With many homes capable of generating between $20,000 and $100,000 in a given season, this significant amount of money can change your tax situation. Therefore, it is advisable to speak with your accountant to ensure renting really is the best option for you.
Any home with a mortgage will be required to carry homeowners insurance and flood insurance, but it is important to make sure that your liability insurance is sufficient to cover your assets in the event of a claim being filed. A homeowner should speak with their insurance agent to make sure their cover for slip, trip, and fall incidences as well as other unfortunate occurrences.
Lastly, it may be advisable to place your home into an LLC or some other corporate form of ownership to protect your assets. By placing a home into an LLC, it can limit your exposure to a potential lawsuit in the event of an accident. This is certainly a situation that should be discussed with your attorney to make sure that the coverage is worthwhile.
Investment in the Long Beach Island Real Estate Market
Buying a home in the LBI real estate market can be a profitable endeavor and summer rentals helped to increase the profitability of the investment. There are few markets where summer rentals play such a strong role and provided a somewhat constant stream of income. When looking to purchase a home on Long Beach Island, it is important to understand the rental market and the LBI real estate rental homeowner information outlined above to ensure you are properly. For more information about the Long Beach Island real estate market, contact me and I will respond right away.
By : Nathan Colmer | The Van Dyk Group
Cell: 609-290-4293 | Office: 800-222-0131 | firstname.lastname@example.org