Cashing in on vacationers

It was only for eight days, yet it was a first.

The retired couple at a remote mountain lake had just rented out their waterfront cabin -- once the family getaway and now serving as their primary residence -- for the first time in the 42 years they have owned the property. Instead of leaving the place vacant when they went to their niece's July wedding in upstate New York, they pocketed $1,600 tax-free dollars.

According to the most recent HomeAway Vacation Rental Marketplace Report, the couple is not alone. Approximately 15 percent of vacation-rental owners have rented their primary residence to travelers, and the practice is becoming more common.

A weakened economy, along with heavy demand for accommodations during popular short-term events like the presidential inauguration and the Super Bowl, have persuaded owners to move out and dust off the welcome mat for eager renters who have come to town.

"With an increased demand for accommodations and limited hotel rooms during major events, HomeAway is seeing more homeowners renting their primary homes to travelers to make a little extra money," said Brian Sharples, HomeAway's chief executive officer.

According to the Internal Revenue Service, owners can derive tax-free income from renting a home or getaway, provided it is rented out for 15 days or fewer and they don't claim any of the tax deductions typically allowed on rental property such as for depreciation or maintenance. Once the 15-day threshold is reached, a different set of tax laws comes in to play.

The survey also revealed that 31 percent of owners surveyed had the same number of bookings and 31 percent had a higher number of bookings this summer than a year ago.

Forty-seven percent of the owners participating in the study charged guests the same rental rates as they did in 2008, while 16 percent had higher rates this summer than the same time last year. Seventy-six percent of owners who offered renter incentives this summer plan to do so again in the upcoming seasons.

The quarterly report found that second-home owners, including those who purchased homes for personal use, only plan to use their homes fewer than 50 days a year. ...CONTINUED

All rights reserved. This article may not be used or reproduced in any manner whatsoever, in part or in whole, without written permission of Inman News. Use of this article without permission is a violation of federal copyright law.