which type of mortgage to get: Second-Home mortgage, or Investment Property mortgage?
I bought a condo in Hawaii, and plan to use it for about 2-3 months of the
year, and rent it out for the remainder 9-10 months of the year.
My question is about which type of mortgage to get: Second-Home mortgage, or
Investment Property mortgage?
Currently, I'm going through the lending process with this property as a
second home mortgage. The stipulation by the lender is that I stay in the
home for at least 2 weeks per year. This will be easy for me to do as I will
be using it 2-3 months of the year.
As I am 5,000 miles away from Hawaii, in Virginia, I will be incurring
sizable travel expenses. I also have a $250/month condo fee and about
$110/month for property taxes. The cost of furnishings is expected to be
about $6,000.
My intention is to deduct not only the mortgage interest, but also all the
travel expenses, condo fees, property taxes, insurance, cost of furnishings,
and all the other costs associated with renting out the condo 10 months of
the year.
Which type of mortgage should I get, if I want to be able to take these
expenses deductions? Can I take all these deductions if the mortgage is a
Second Home mortgage?
This has got to be a common-knowledge question for anyone who is doing this
already, and there must be some very definitive answers. As I've never done
this before, I'm at a loss and hope someone here has the answers.
I think you are treading on thin ice with the travel expenses (airline
tickets). My Earnest and Young Tax Guide states "If your trip was
primarily for personal reasons, such as a vacation, the entire cost of
the trip is non-deductible personal expense." This is a pisser. If
you actually went to maintain your condo for 3 days and did nothing
else, the travel would be deductible.
Poke around the IRS website.