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!

If you’re interested in investing in real estate, you can consider doing so with a Self-Directed IRA to defer taxes on capital gains until you actually withdraw the funds from your IRA.

@Fulati PaerhatiA 1031 exchange is a powerful strategy to defer capital gains taxes and grow your rental portfolio.

NOI Underwriting Methodology: NRI and EGI, real estate taxes, operating expense underwriting rules of thumb, replacement reserves, appraiser’s impact on lender underwriting, expense comps, etc.10. 

Low property taxes (1.1%) and not a lot natural disasters as well.

It is DSCR based and no personal tax returns are required to qualify.

Wanted to still be close to family but maintain a cheaper lifestyle, still have strong appreciation, and much better tenant/landlord laws, taxes, etc. 

This creates two loan payments ($100,000 of equity and $300,000 on the new mortgage).Key NumbersHome Equity Loan Interest Rate: 6%Mortgage Interest Rate: 7%Rental Income: $3,000 per monthExpenses (management, taxes, insurance, maintenance): $800 per monthIncome and ExpensesMonthly Rental Income: $3,000Monthly Expenses: $800Monthly Mortgage Payment: $2,000ExplanationThe investor earns $3,000 in rent each month.They pay $2,000 on the investment property mortgage and $800 on other expenses.This leaves $200 profit each month or $2,400 per year.However, you have to pay $6,000 interest on the equity borrowed.This leaves you with an annual loss of $3,600.While the rental property generates positive monthly income, the interest cost of borrowing the initial $100,000 results in an overall loss.

An annual business tax as a hotel of $50 and collection and remittance of transient occupancy tax of 12% from renters is required of all short-term vacation rental operators.

Start by talking to a cross-border CPA and attorney to handle taxes and legal structures properly.