Maximizing Financial Benefits of Personal Residence

[Chris Mooney]

Hi all!

I bought a house last year that has been my primary residence (although I will eventually list the basement studio on Airbnb). I'm doing a considerable amount of DIY renovations. I'm redoing the studio basement, turning the garage into a functional space (office, yoga studio, etc.), will modernize the kitchen (paint the cabinets, redo tiling, change countertops and sink), and the bathroom (updating almost everything in it).

I bought the house at market rate, so I didn't "buy" a deal, but am hoping to leverage a few strategies to maximize the value we get from it. Strategies are:

1. Airbnb the basement studio 

2. Use the garage as an office space for my side business and write off that space on taxes

3. Treat this as a live in flip and if I sell in a few years, not be taxed on capital gains

I have two questions:

1. Are there any other strategies any of you would recommend to make the most out of my situation? 

2. Are there any specific requirements for this to be considered a live in flip? How do I ensure any appreciation gained through my DIY renovations end up not hit for capital gains tax? Any advice at all on this topic is more than welcome.

Thanks everyone, and be safe out there!