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Is using home as short-term rental a good idea?

February 16, 2018
By ERIC FEICHTHALER - Real Estate Law , Cape Coral Daily Breeze

Dear Mr. Feichthaler:

With season upon us, I have a question that many may be thinking of. I can rent my home out during the peak tourist season for $1,500 per week. If I rent out for a month, I would be able to pay my property taxes for the entire year! I could stay with my kids and grandkids for a few weeks. Good idea?

- Natalie C.

Dear Natalie:

We have seen higher traffic both on the roads and in our offices than anyone can remember. Our economy has fully recovered from the downturn, and there is a great sense of optimism. Our winter visitors are here in record numbers, and many are looking for a rental home. Of course, the idea to make some great money while spending more time with the grandkids could be fantastic, but there are a few concerns to consider.

First, assuming you are homesteaded, you must be very cautious about taking any action to lose homestead. Not only could you lose the asset protection that homestead offers, but also the significant property tax savings each year due to the reduction in value and the Save Our Homes cap. The law provides that you will be considered to have "abandoned" your homestead if you rent the property for more than 30 days over two consecutive calendar years. Therefore, if you were to rent the property out for 4 weeks and only four weeks, and not rent next year at all, your homestead would be intact. If you rent for more than 30 days, even if at a week at a time, you endanger those significant tax savings.

Another issue to consider is the requirements to engage in short-term rentals. Any rentals that are under 6 months are considered "short term." Sales tax applies to short-term rentals in Florida, so there is a 6 percent tax. Additionally, Lee County charges an additional 5 percent on short-term rentals for tourist development. You will need to register for both taxes and collect and remit for them. Failure to do so can result in significant penalties, and the local tax collector does monitor vacation rental websites, Craigslist and other places where rentals are advertised.

Finally, if you still decide to rent out your home after taking these concerns into account, you will want to have a lease that clearly delineates rights and responsibilities, and that you have sufficient deposits and insurance to deal with the unexpected.

Whatever you decide, don't forget to visit the grandkids!

Eric P. Feichthaler has lived in Cape Coral for 28 years and graduated from Mariner High School in Cape Coral. After completing law school at Georgetown University in Washington, D.C., he returned to Southwest Florida to practice law and raise a family. He served as mayor of Cape Coral from 2005-2008, and continued his service to the community through his chairmanship of the Harney Point Kiwanis Club KidsFest from 2011-2015, which provides a free day of fun and learning to thousands of Cape Coral families, and funds numerous scholarships. He has been married to his wife, Mary, for 14 years, and they have four children together. Recently, he earned his board certification in Real Estate Law from the Florida Bar. He is also a Supreme Court Certified Circuit Civil Mediator.

This article is general in nature and not intended as legal advice to anyone. Individuals should seek legal counsel before acting on any matter of legal rights and obligations.



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