Tom’s friend Tim Hubbard has figured out how to turn short-term rentals into a passive income stream. Here are three steps Tim uses to turn short-term rentals into passive income.
First, build the right team. A quality management team is crucial in the short-term rental market. In Tim’s experience, the right price and great reviews — both responsibilities of your property management — can double your income on a property.
Second, create systems. To truly create passive income, you need to make sure your management team is equipped with the right systems. This includes a system for communicating with guests and managing the guest experience, checklists for housekeeping and a process for holding everyone accountable.
Third, let go of control. This can be tough for a lot of investors. But if you’re going to turn a short-term rental from active income into passive income, you must delegate the work to your management team and trust that you have the right systems in place.
Short-term rentals offer multiple benefits to your tax strategy. As a start, you’ll have tax deductions from various expenses related to managing and renting the properties, and you also can use depreciation.
If short-term rentals or other real estate investments are part of your wealth strategy, schedule a call with the team at TFW Advisors® to learn more about how you can maximize the tax incentives!