Football Weekend Rental Income

*Disclaimer: I am not a tax professional. I am a real estate professional. This article is to inform the reader about an IRS tax form that they may want to read if  considering renting their property during college football season in Oxford, MS.  When making decisions that can affect your taxes, always consult a tax professional.

Many Oxford homeowners rent their homes or condos during Ole Miss football weekends. Some live here year-round and stay with local relatives or camp out in the family RV on football weekends in order to make some extra money by renting their home in the fall.  I know of families making $1000+ depending on who the Rebels are playing that weekend.

Others have a second house or condo here and visit for some games, renting their place out during games they can’t get here for.

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Each of these homeowners that rent out their homes for a weekend earn Christmas money, vacation money, pay-the-mortgage money, what-ever-you-want-it-to-be-for money.  The point is that many Oxford homeowners rent their homes short-term.

There are HOAs that don’t allow this practice, so if you live here or plan to buy a house or condo in the near future, check your HOA rules before advertising your home in the fall. But for those who can rent, it can be extra money.

Consider the cost, though, for advertising, cleaning, and staying somewhere else that weekend when you price your rental weekend.  Do you have family in town you can stay with? Do you have an RV you can camp out in while strangers rent your house?  Are you planning to be away that weekend anyway?

Check with local rental companies that specialize in this type of rental.  Ask friends who rent and get their list of pros and cons. Consider the number of new hotel rooms in town.

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Football isn’t the only weekend for rentals. There other Ole Miss sport events, local conferences and festivals that also bring in tourists wishing to rent a house, rather than a hotel room, for the week or weekend. Graduation is a popular time for week-long rentals as student’s family members pile into town to celebrate.  Oxford is also a wonderful wedding town with so many classy venues.  Guests and family members might rather stay in a house than a hotel as they prepare with pre-wedding festivities.

Real estate can be an investment so don’t just consider whether to buy a second home in Oxford based on your ability to rent short-term.  The real value is in the equity you might be able to grow through the years of ownership, and the enjoyment you will have when you use it to visit this great little town.

If you are wondering about how renting your home affects your income taxes, click this link to the IRS form (topic 415) explaining short-term rental income.  It talks about the deductions you might be able to take and the taxes you could pay with a rental property. But it also reads: “There is a special rule if you use a dwelling unit as a personal residence and rent it for fewer than 15 days.” Read up on what this special rule says for your situation.

With only 7 home football games you may not have to worry about keeping track of or reporting your rent income. Laws change year to year and while this one is current as of this writing, it may change tomorrow. Please read carefully and always consult your tax professional for advice before making plans to rent your home.

 

Eileen Saunders, REALTOR, SRES, Tommy Morgan Realtors,  2092 Old Taylor Road, Oxford, MS 38655~662-404-0816 or 662-234-5344~Equal Housing

 

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Your Home’s Value

I am a homeowner in Mississippi which is a non-disclosure state.  That means that what I paid for my house is not public information.  It is information that is on the MLS Board where my home is located and can be used for comp purposes by other agents in the MLS Board but otherwise, Mississippi law says it is no one’s business what I paid for my house.

So I recently got a letter from my mortgage company which is not located in Mississippi.  It told me how much equity I have in my house based on my loan balance and a value of the house.  The letter said that the value is an estimate “based on market trends” in my area.  Since they do not have access to information in this non-disclosure state, the value of the house is much lower than what I paid for it.  It’s because they really don’t know the value of my house.  As I read closer, I realized the value was the original loan balance.

I’m a licensed real estate agent in my MLS Board and know the market trends and have available the comps to tell me the value of my house.  BUT, if I wasn’t, this letter would have scared me to death making be believe my house was losing value.toy-37512_960_720

My point is, if you live in a non-disclosure state, like Mississippi, and get a letter from your mortgage company telling you the value of your house, question it.  Calmly call your agent and get a comp analysis. It’s not a bonafide appraisal but close to it; it’s a market value, and in this hot, hot market you’ll most likely be pleasantly surprised.

If you live in the Oxford/Water Valley/Batesville/Pontotoc area and want a free comp analysis, contact me for an appointment.

Eileen Saunders, SRES REALTOR, Tommy Morgan Realtors, 2092 Old Taylor Road, Oxford, MS 38655   662-404-0816 / 662-234-5344 equal housing

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Copyright 2018 NATIONAL ASSOCIATION OF REALTORS®

 

What Buyers Need to Know in a Seller’s Market

A seller’s market exists when there are more buyers and less inventory. We definitely have this going on around Oxford, MS as well as the rest of the country. 

Buyers, therefore, need to be ready on the mark so they don’t miss out.  Before looking for a new home, be prepared to actually buy.  Here’s how: 

  1. Get pre-qualified for a mortgage and have your paperwork handy. In fact, give it to your real estate agent. If you happen to decide to place an offer on a house and logistics require e-signatures, your agent will already have the pre-qualification  letter on hand to submit with the offer. If you are paying cash, have a letter from your bank ready with proof of funds available. 
  2. Hire a real estate agent. These professionals will see immediately when new listings are available and can get you a video preview (if you are out of town and can buy sight-unseen) or, can get you an immediate appointment to view the house.   
  3. Be available when your real estate agent calls. Lingering over your schedule may cost you an opportunity. 
  4. When you make an offer, limit your contingencies.  Asking the buyer to wait for you to sell your house in a seller’s market may be unreasonable. They’ll sell it to the next person in line.  
  5. Don’t wait. Even a house that may have a history of sitting on the market can be sold overnight in a seller’s market. There are plenty of reasons that house hadn’t sold quicker, such as financing falling through from a previous offer or damage repairs taking place from a storm.  Don’t think that it will be there next week for you to decide on. 
  6. Compromising on what you want isn’t a bad thing.  You might have to look outside of your perfect location or go after a home that needs a little TLC. 

 

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Merio/Pixabay

If you are shopping in Oxford, prepare for sticker shock. Our home values tend to run a bit higher than the rest of the state. Keep in mind that chances are great that you will not find a 3 bedroom/2 bath “near The Square” for $250,000 or less. Talk to your real estate agent about the various neighborhoods that are in your budget and how far from The Square these are located.  You might find a gem in your price range with easy access to football games, restaurants and shopping.  I know of at least one condo association that runs game-day shuttles and the OUT bus (Oxford-University Transit) is also available regularly to help students and year-round residents get where they need to go. 

So, ARE YOU READY to house-hunt? 

Eileen Saunders, Realtor® with Tommy Morgan Realtors, 2092 Old Taylor Road, Oxford, MS 38655. 662-404-0816/662-234-5344 Equal Housing 

Information Sourced from “Surviving a Seller’s Market: The Ultimate Cheat Sheet,” realtor.com® (April 7, 2016) 

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