Next Option

The posts come and go like mad on this forum, so would you please indicate which island you're looking at? That would help those qualified to reply!

We were looking at STT or STX.

Thanks.

S and G

Yes just like stateside you can pay someone to rent out your place. One months rent as commision to simply rent it out. 15 to 25% percent of the montlhly rent to oversee it (repairs etc) and pay bills. Also when overseeing it they generally take one months rent as commission as well and there is usually a upcharge for taking care of repairs and this is really quite fare when doing repairs here is never a simple business. And yes you will have to pay property tax here as well just as if you owned property in another state or city.

There are Many property managers on both islands. After you pick an island and a house then you'd wanna ask the board for recommendations. As I'm sure we have more then a few people here with investment properties. A landlord has the right to inspect their property with proper written notice, I would strongly recommend doing this at least once a year as the weather here is very tough on houses and condo, you have to stay on top of them.

Thanks Betty. Just to clarify one of our questions. We know we have to pay property tax to the VI. Our question was more with regards to the income from renting it out. For instance if we live here on Indiana but receive income as property owners from say Illinois we have to report income to both states and pay whatever taxes we need to pay to one or both states. With the VI being considered a territory and not a " state " how does that work ?

Sorry if we confused anyone.

Thanks.
S and G

From what I’ve been told by villa owners who live on the mainland, after mortgage payments, high utility costs, hurricane insurance, taxes, paying for upkeep and a management company to rent out your villa, most consider themselves lucky if they break even for the year.

very good point trlk. if you make a profit it will not be much and most likely not taxable. You have to figure about 3% on the house cost for insurance alone, not counting flood insurance. Condo fees may seem high but after owning a house here, they seem pretty reasonable to me. Taxes are fairly reasonable here. Always make your renters pay for electric unless you put some kinda of clause in it for a limit ( I learned my leason on that one).

Now if you are able to hold onto it for ten years or so then maybe you will be making some kind of profit as rental rates rise. Something else to think about rent range in stx by location, you are going to get more rent (generally speaking) for a house on the east end the west end, a house with a view or a house with no view and so on.

There are a lot of property management options on the island. The best service to use for your rental property depends largely on the type of rental it will be. High end villas for short-term rental are one category that has a few big players in the management field. Short-term rental condos also have a few specific management companies who handle the bulk of the offerings. Long-term rentals in all price ranges and types are the third category.

Short-term rentals have the potential to bring in the largest gross income, but due to the higher management fees involved and the higher maintenance expenses, plus the landlord pays all utility bills for short-term rentals, it often winds up that long-term rentals make the same bottom line net income as their short-term counterparts. People who want to use their property themselves for vacations now and then often choose to go with a short-term rental initially, but may eventually shift it to long-term rentals and come down to visit it between tenants.

Selecting the right property is important. Some property types rent better than others. Some condo complexes do better as rentals than others and command higher lease rates. Some neighborhoods are greatly in demand for home rentals and others are avoided. Your target tenant is very important to consider when you select your property. Anyone who is willing to allow pets in their rental can pick up a whole lot more potential tenants since so few landlords allow pets. Some of these tenants will pay extra if they can keep their pet. There are many variables to discuss as you decide which property type you would want to own and where on the island to focus your search.

Be sure & check this with your tax person but I had rental property in the States while I was living here. i was allowed to write off my plane fare once a year to visit the property. I would assume it would work the other way as well & possibly you could write off hotels but that I'm not sure of. As I say, make sure you check that out before you attempt to write anything off.

Also, make sure your rental agent doesn't just rent to anyone who walks in the door. That can be big trouble if you own a 1 or 2 bedroom & have a whole bunch of people move in with the tenant because your property will be destroyed.

ah, yes, on the tax question, definitely talk to your mainland accountant prior to buying a property. You might want to have a phone call with a USVI accountant also. Some kinds of income would require that you file tax returns both on the mainland AND in the USVI. It all depends on how you do it. Some landlords find that setting up an LLC to own the property helps them with their tax confusion. I think that then you can file your personal income tax return on the mainland and the LLC can file in the islands... but again, verify that with an accountant in the USVI. I've heard conflicting instructions and am hesitant to stick my neck out completely on that subject. Others file a Schedule "C" for the rental income and expenses, especially if they are trying to use "losses" from investment property to limit their taxes on their other income. You do get a lot of write-offs with investment property and it's worth checking out.