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General Landlording & Rental Properties

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Jim Lou
  • Investor
  • Philadelphia, PA
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Amenities for tenants to increase revenue?

Jim Lou
  • Investor
  • Philadelphia, PA
Posted Sep 2 2015, 00:32

So I had a great idea this year to generate some additional rental income. I have some rental properties targeted to mostly young professionals in Philadelphia. My tenants are all highly educated, well qualified, and gainfully employed. I have in total 20 tenants. When each tenant signed the lease I told them that they would each have exclusive use of a beach house that I rented for them at the jersey shore. I was able to raise rent $50/tenant/month for this option resulting in approx $12,000 in additional income. 16 of the 20 tenants used the house this summer and myself and my fiancée also used it on days that the tenants weren't able to. 

So my question is this: where on my schedule E would i deduct the rental? Is this legal? I paid $15000 for the rental for the season and would only be deducting 12,000 of the 15000 paid due to some personal use. Does anyone see any potential issues that could arise? 

As of now I haven't profited from doing this, however next year I would like to organize it better and hope to make a nice profit. Not to mention when I give tenants the option for this deal most love it and I've reduced vacancies drastically. 

Please advise as I think I might be onto an amenity that would certainly increase my revenue and decrease vacancies. 

Thanks in advance!

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