Buying a Property as Vacation and Turning it into Rental

[Karla Parraga]

Hello all,

I am planning on buying a property in Daytona Beach. At the beginning I was planning on buying the property as investment. Later it occurred to me that I can I can buy it as a vacation home, while I go visit this Summer and enjoy my first property, and in six months start renting it out as an investment property. My question is, is this legal? At tax time, how is this property going to be treated, as a vacation home (as I initially bought it) or as an investment property? 

Thanks guys! Any link with some good info will be appreciated! 

[Krista Goodrich]

Hi there!  Congrats on the move!  I am an avid Daytona investor and can shed some light on this.  Currently, short-term rentals are prohibited in the residential zones of Daytona, they are only allowed in the T1 Zone (which is on A1A near the hotels-there are only 24 legal short term vacation rentals in Daytona).  I own homes in both zones.  However, I and several others, are in a lawsuit with the city fighting their ordinance and trying to get short-term rentals allowed in all zones (I mean it's Daytona Beach!), we have a hearing on 2/2 and the Florida legislature is actively debating the issue this session.  So that being said, if you plan to Airbnb your home, just hope you have good neighbors-that is the key.  When I first purchased in Daytona I did not know short-term rentals were illegal and I purchased two homes-both of which rented like crazy.  One of the homes the neighbors are super cool and we never had a problem-the other home had people living behind our home that didn't like the sounds of kids in the pool and they complained to the City (yep, we have a pool so don't judge me other investors out there as I would argue all day long for pools at vacation rentals).  We had to stop renting out that house and turn it into a long-term rental.  It's a really hot issue in Daytona-if you Google it you will find all kids of articles.  Sorry, hate to bring bad news on that-and you can definitely still try it just know you may get shut down or fined.

That being said, Daytona is a great market to invest in-at least in my opinion.  The prices are incredible and there is so much going on that I only foresee good things for the area in the near future.  Where else can you live a block from the beach for under $200k?  

If you have any questions or want to join our efforts to make short term rentals legal in Daytona shoot me a message and we can grab coffee.  And good luck in your new home!