The 1099 Question: What it is and when to ask
With the New Year commences the traditional resolutions, goalsâ€¦and tax paperwork. Soon youâ€™ll be receiving from your property management firm your annual form 1099-INT. This form denotes all of your taxable income earned from your vacation rental home(s) and normally itâ€™s a number you can readily forget once your taxes are done. However, itâ€™s a good idea to have this figure in a handy place, because as the year progresses, youâ€™ll hear from other firms looking to woo you with tales of how much money they could earn for you. The â€œ1099 Questionâ€ offers a baseline for you to make an informed, comparative decision.
Competing firms employ a lot of tactics to convince you to move your home into their rental program, and one of those tactics is the income listed on a rental income projection. The simple fact is not all of those numbers represent an accurate picture of what you could expect to earn. You may see terms like Owner Income, Owner Rate, Advertised Rate, Gross Income, & Net Income, but what they mean can and do vary from projection to projection.
â€œIs this what I could expect to see on my annual 1099â€? Itâ€™s a seemingly simple question on the surface. So why then is it an important question to ask? Because when placed in the context of a rental projection, it helps peel back irrelevancies and provides you with a reference point with which to weigh the information being presented to you. This allows you to make a more informed decision on whether your home(s) can reasonably expect to achieve the listed income in question.
For more information on your vacation home investment and reading your 1099, contact David Pergerson, Director of Rental Management: 252.441.5000 Ext.2010 or David.Pergerson@ResortRealty.com.