Hi Jon from Boyertown, PA-You and your fiancé are interested in buying your first short-term rental and wonder profitable areas to purchase with a budget up to $500,000.I would look at places along the west coast of Michigan, Grand Rapids, Kalamazoo, and near Ann Arbor, MI.It is important to understand the local STR regulations in each community and partner with a property management company that can help your navigate that and manage it well for an excellent guest experience.Don't forget to look into bonus depreciation and doing a cost segregation study to increase the tax benefits of ownership and if you "materially participate" in the management of the property per IRS guidelines it can offset active W-2 income which most real estate cannot.To Your Success!

This would be an easy decision however I do not think you can come close even with you being active in the process.  

I am still in the learning phase, but I am actively researching some local markets to hopefully find something this year.

S-Corps are better suited for active income (e.g., property flipping).

I’m currently working on a deal in Fort Lauderdale & actively looking for financing solutions like hard money or private lending.

He's an investor himself and recently left his role as partner at the largest firm in the area to start his own company.

He's an active STR investor and investor focused agent.  

There are likely active real estate investing groups for Tacoma and the surrounding area.

Because you are not changing the tax return that reports the activity of the property.But... the IRS holds the position that Husband/wife LLCs can only be disregarded in community property states. 

That way you know they are active in the BP community!