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Author: inparadise Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121598  
Subject: Re: Taxes: Schedule C or E Date: 8/9/2012 7:44 PM
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I'm guessing the nuance here is the difference between showing a profit and making a profit. 8-)

It can be quite possible to do both. Even though you certainly don't rent for 52 weeks out of the year, though some people have managed to get quite close to full occupancy, one weeks vacation rent typically is around what you would get for one month rent as an unfurnished long term rental. Or more than one month's rent if in a very rural area.

For example, our place in rural VA would get about $500-600/ month as a long term rental, but furnished, including electric, cable, internet, phone, and kayaks, we expect to get about $1100/week. Granted, we might just rent for 15-20 weeks, but it takes only around 7 weeks rental to pay all our expenses other than the time I spend lining up renters. On top of that, we can take advantage of the unrented time, at Uncle Sam's expense as long as we do at least 4 hours work on the place every other day.

It took a long time for us to find a place that would be cash flow positive and have a positive return on equity. Unfortunately, it's also taking us a long time to get people to work on the place. No one seems to want to work anymore. But that's a thread for another board.

Money can be made quite nicely in this industry, even eliminating any possibility of appreciation from the calculation. Money can also be lost in a big way. The property you buy, the market you buy into, and how much you pay for the place pretty much dictates your success or lack thereof.

IP
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