Contrary to multiple letter writing campaigns and already being historically the 4th highest state an overall tax burden according to the Tax Foundation, Vermont‘s legislature has apparently just increased the state M&R tax to 12% which appears to bump it up to the 4th most taxed state in the country for short term rentals, according to the National Conference of State Legislatures: 1.

The 50% rule states that approximately 50% of EGI will typically be consumed by operating expenses.While the 50% rule provides a quick estimate, actual expenses can vary widely depending on the property type, location, age, condition, tenant mix, and market conditions.Here's an example: if a property generates $200,000 in EGI per year, the 50% rule suggests $100,000 would go towards operating expenses like taxes, insurance, utilities, and property management.

The seller may face a big tax bill if they receive a pile of cash at closing.

FOR SALE Lessons learned?

This is the best place to learn about real estate investing. 

What tax structure should we use?

I (Dillon Duffy) have been working on a building for a few weeks now and listening to Bigger Pockets podcast and videos on YouTube and trying to self learn how to navigate through this exciting but stressful project.I purchased my current home in May 2021 for 156k.

However, keep in mind that in some states including mine (PA) that you get hit with property transfer tax twice.

I just sent you a message hoping to connect to learn more.

My gut response is for us to sell at 2 year mark and collect the equity (tax free).