How to Find Cash in a Second Home

Second homes are a tougher sell during an economic slump when people are reluctant to buy first homes.

Owners who discover their vacation homes have become a financial burden can find ways to generate income from their properties, say real estate professionals with experience in making second homes pay off.
Here are some of their suggestions:
1. An owner can rent out a property for two weeks without paying taxes on the income. If there is an annual cultural activity, like a film festival, it can provide a good opportunity to make significant money.
2. Concentrate on renting properties profitably. An effective do-it-yourself Internet rental campaign can cost less than $500 and yield thousands in return. One option is to put an ad on VRBO.com which is the Web site for Vacation Rentals by Owner.
3. Donate a week or two stay at your vacation home to charity and then take a tax deduction for the gift. VacationHomesforCharity.com will help identify the right value.
4. Donate the whole property to charity. The owner can maintain a life estate which is the right to live in the house until death.
5. Appeal property taxes. Municipalities are recognizing that some assessments are out of whack and will adjust them.

Source: The Wall Street Journal, Suzanne Barlyn (06/08/2009)