Should I stay or should I go now?

[Tasha Rivard]

This is my first ever post on BiggerPockets though I have been lurking for years. I’m intimidated to say the least 😂). I’m hoping this community could help guide me in the right direction! Here’s my situation: 

I currently own a home the vacation destination New Smyrna Beach, Florida. It’s a 3/2 pool home that’s not on the beach but close enough to be desirable (10min), but is only zoned for midterm rentals. I bought it in 2020 and have a 2% interest rate.

I’ve been casually looking for an investment property for a while and found a great deal on an ideal AirBnb house a town over in a similar neighborhood/distance to the beach/other attractions. This one IS zoned for short-term rental. Given the fact that I’m single and have zero dependents I figured it may make sense to move to the new house for at least a year to get a primary residence mortgage with a lower rate and rent out my existing house as a furnished mid-term rental.

My question is around taxes: my current home needs significant repairs and updates (about $20-30k’s worth 😬) before it’s ready to be rented (the pool enclosure went partially down during a storm among other things). I’m *thinking* that if I start renting my original property this year and move to the new house as a primary, those repairs can be deducted? What about any repairs I’ve made earlier this year? What if after 1 year in the new property I decide to move back? How should I legally structure all this?

For reference I work a full-time remote W2 job but I do have the time and bandwidth to do this. The numbers seem to check out, but there still a lot to consider that’s over my head… What would you do in my situation?

I’d also love to connect with a knowledgeable real estate CPA as well as a lawyer in the Orlando/New Smyrna area if anyone has recommendations! I’m super excited to get started in real estate to have access to this community!

TIA!

[Stephen Ceausu]

Great question! Definitely a CPA should be guiding you through the process but I think for starters having clear documentation of WHEN you moved out is critical for any buisness expenses. Think about changing mailing address to new property immediately and even drivers license. Hope this helps