Selling Turnkey STR-Ready THOW – Any Advice?

Question

Has anyone here bought or sold a NOAH certified THOW? I have one listed and curious about the investor appetite for turnkey STR-ready tiny homes.

Andrew Steffens · Answer

Interesting question.  I have never sold (or bought for that matter) one but I know there is a segment that likes them.  If there are good returns there is likely an investor out there who would want it.  However right now 80-90% of my investor/buyer pool are looking for tax benefits via accelerated depreciation.  Maybe @Christopher Tile can answer if a tiny home on wheels can qualify for the tax benefits.  I know some states classify them as vehicles, but even heavy vehicles qualify for tax benefits via Section 179.

Britni Wilcher · Answer

Thank you @Christopher Tile, this is incredibly helpful! Gives me a much better angle for reaching the right investor buyer. Really appreciate the insight

Christopher Tile · Answer

My pleasure @Britni Wilcher - if you ever have any STR operation questions @Andrew Steffens is one of the most trusted guys on BP.

Any tax questions - feel free to reach out to me. There's a ton of other extremely well experienced CPAs on the tax forum that can absolutely loop in their thoughts as well.

Christopher Tile · Answer

Thanks for looping me in @Andrew Steffens.

@Britni Wilcher - happy to speak on this from a tax perspective. If you'd like to clarify your business use/exactly what you plan on doing with the THOW, this could alter my response or cause me to clarify further. However...A NOAH-certified THOW is generally considered personal property, not real property (regardless of certification). For an STR investor like yourself, it would likely be classified as 5-year MACRS property (similar to an RV), meaning accelerated depreciation rather than the standard 39-year life for an STR. With 100% bonus depreciation back, this is definitely advantageous for anyone looking to materially participate while keeping the ALOS (average length of stay) under 7 days - (the STR "loophole").This holds whether the THOW is being added onto an existing rental parcel (simply adding the THOW as a separate asset on your tax schedule/financials) or used as a standalone investment, the tax treatment is the same either way. The main thing an investor needs to have in order is solid documentation on asset basis and genuinely meeting the material participation threshold.

Selling Turnkey STR-Ready THOW – Any Advice?

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