Buying my first STR today!

Tulsa, Oklahoma
Short-Term & Vacation Rental Discussions
1dFollow

Buying my first STR today!

Crystal Crow
Investor · Claremore, OK · Member since 2026 · 10 posts · 6 votes

Hey everyone. I posted a few days ago, thank you for all of the replys.

Im so new to this, and working backwards. I saw the house for sale, decided to buy to STR it, and I close today!

I have to paint and repair a few things. And I plan to have my children and I clean between guest stays.

I dont have an LLC. I plan to compensate my children for their time. How do I best document this?

I want to get the highest tax benefits possible, i know I need 100hrs of my own time, but do my children's time count towards my 100??

Also. If theres any real-estate CPAs in my area, I'm still looking for one. (NE of Tulsa)

Thank you for any and all help. P.s. I'm super excited and nervous right now.

4Reply
362 views

Most Popular Reply

Jules Aton
MD/DC · Member since 2024 · 1k+ posts · 1k+ votes
21h

Congratulations!

2Reply
See this reply in the discussion

21 Replies

Jump to latestLatest
  • Trent Reeve
    Atlanta · Member since 2022 · 706 posts · 634 votes
    1d

    im no CPA, but i do not believe your childrens time counts for you. And i hear that the IRS is really starting to crack down, so make sure you document your hours very well.

    1Reply
    • Crystal Crow
      OP
      Investor · Claremore, OK · Member since 2026 · 10 posts · 6 votes
      23h

      Thank you. Can i just use an excel sheet that has "name. Start time. Stop time. Work done"??

      0Reply
    • Trent Reeve
      Atlanta · Member since 2022 · 706 posts · 634 votes
      22h

      I would search in here and also there are a few good facebook groups for STR's. There have been suggestions for apps and other things for tracking hours, but I cannot remember them right now.

      1Reply
  • Andrew SteffensBusiness Member
    Tampa, FL · Member since 2022 · 3k+ posts · 3k+ votes
    1d

    I would highly recommend @Christopher Tile@Christopher Tile@Christopher Tile

    He is in NY but I am in FL and he is my CPA. Very knowledgeable about taxes and RE/STR specifically. Congrats and good luck!

    [email protected]813-563-0877
    Vacation Rentals of Florida53 Reviews
    WebsiteView Page
    1Reply
  • John UnderwoodPro Member
    Investor · Greer, SC · Member since 2014 · 13k+ posts · 17k+ votes
    23h

    Congrats!

    You should start interviewing local CPA's.

    Do you have a nearby Real Estate club you could join and get recommendations from?

    1Reply
    • Crystal Crow
      OP
      Investor · Claremore, OK · Member since 2026 · 10 posts · 6 votes
      23h

      Oh. Im not sure. I will ask my realtor. Thank you

      0Reply
  • Christopher Tile
    Accountant · Long Island, NY · Member since 2021 · 182 posts · 144 votes
    23h

    Thanks @Andrew Steffens for plugging me in.

    @Crystal Crow A few quick answers for you:

    • To pay your kids, the correct way to do it is run payroll. Definitely worth the research/talking through with a CPA.

    • Your kid's hours do not count towards your material participation

    Also, nerves are a good thing! This isn't easy for anyone, but nothing is ever as bad as it seems. Once you get the first few bookings, you'll be fine!

    1Reply
  • Jules Aton
    MD/DC · Member since 2024 · 1k+ posts · 1k+ votes
    21h

    Congratulations!

    2Reply
  • Michael K GallagherBusiness Member
    Real Estate Agent · Columbus OH · Member since 2018 · 1k+ posts · 1k+ votes
    21h

    @Crystal Crow welcome to the forums and I love that you just jumped in and are figuring it out, bit congrats! that's something I'm working to get a bit more of in my life.

    [email protected]614-362-2231
    1Reply
    • Crystal Crow
      OP
      Investor · Claremore, OK · Member since 2026 · 10 posts · 6 votes
      11h

      Welp. I hope it works out for me. I tend to fret. But while i fret, i work bit by bit towards my goal. Sometimes i laze, sometimes i scramble. Its not the most organized. 😅

      0Reply
  • Diana Khan
    Attorney · 10451 Mill Run Cir #755 Owings Mills, MD 21117 · Member since 2024 · 300 posts · 112 votes
    21h
    Quote from @Crystal Crow:

    Hey everyone. I posted a few days ago, thank you for all of the replys.

    Im so new to this, and working backwards. I saw the house for sale, decided to buy to STR it, and I close today!

    I have to paint and repair a few things. And I plan to have my children and I clean between guest stays.

    I dont have an LLC. I plan to compensate my children for their time. How do I best document this?

    I want to get the highest tax benefits possible, i know I need 100hrs of my own time, but do my children's time count towards my 100??

    Also. If theres any real-estate CPAs in my area, I'm still looking for one. (NE of Tulsa)

    Thank you for any and all help. P.s. I'm super excited and nervous right now.

    @Crystal Crow, congratulations on closing! I've worked with new investors who felt like they had to set up an LLC right away because they thought it was part of getting the tax benefits. I would not rush that piece just because you are starting an STR.

    The tax side and the ownership side are really two different conversations. I'd talk with the CPA about the hours and paying your kids, and separately look at how you want to own the property, your insurance, and the local STR rules. If you decide later that an LLC makes sense, I'd have the title, loan, and insurance reviewed before changing anything.

    I’d be glad to stay connected, @Crystal Crow. You’re asking the right questions early, which is much easier than trying to fix the setup after everything is already running.

    1Reply
    • Jane Ukamaka
      Virtual Assistant · Member since 2026 · 2 posts · 0 votes
      16h

      Congratulations Crystal

      0Reply
  • Matthew Tregoning
    Real Estate Consultant · Melbourne, FL · Member since 2019 · 185 posts · 107 votes
    18h

    Congrats Crystal! Once the repairs are done, spend a night there before opening the calendar. Cook, shower, sleep in a guest bed. You'll catch little stuff that's easy to miss when you're just in and out working.

    2Reply
    • Crystal Crow
      OP
      Investor · Claremore, OK · Member since 2026 · 10 posts · 6 votes
      15h

      Oh. Such a good idea. Thank you

      0Reply
  • Min JangPro Member
    Accountant · Member since 2026 · 5 posts · 2 votes
    16h

    Congrats on the closing. Before focusing on the 100 hours, I'd confirm which material participation test you expect to meet and whether any projected STR loss would actually be usable on your 2026 return. Paying your children and tracking your own participation are separate issues, so I'd have both reviewed before setting anything up. We work with rental owners remotely and may be able to help!

    1Reply
    • Crystal Crow
      OP
      Investor · Claremore, OK · Member since 2026 · 10 posts · 6 votes
      15h

      Ok. Thank you. I assumed that children working with me would be the same as spouse working with me (they both fall under the 100hrs). But im glad i asked, because it sounds like i was wrong. Hahaha 😔

      0Reply
  • Aaron ZimmermanBusiness Member
    Accountant · Chicago, IL · Member since 2018 · 2k+ posts · 1k+ votes
    14h

    Children's time would not help you. I can send you a spreadsheet that will help you document material participation for STRs. Feel free to pm. 

    congrats on your purchase! 

    [email protected]
    Brick House CPAs53 Reviews
    WebsiteView Page
    2Reply
    • Crystal Crow
      OP
      Investor · Claremore, OK · Member since 2026 · 10 posts · 6 votes
      11h

      Hey Aaron, i'm using the free BP. I requested a "connect". P.s. this is all new to me and i didnt watch the "how to use BP forum" video. 😅

      0Reply
  • Cristal Smith
    Member since 2022 · 3 posts · 1 vote
    11h

    Congrats!

    1Reply
  • Mike GrudzienPro Member
    Lender · Eugene, OR · Member since 2019 · 2k+ posts · 1k+ votes
    11h

    Wish you much success!

    0Reply
  • Ashish AcharyaBusiness Member
    CPA, CFP®, PFS · FL · Member since 2017 · 5k+ posts · 3k+ votes
    4h

    Crystal, congrats on getting your first STR closed. The biggest thing I'd clarify right away is that 100 hours is not automatically the requirement for every STR, and your children's hours generally do not count toward your own material-participation hours.

    For the common STR strategy, you first look at whether the activity falls outside the normal rental-activity definition, often because the average guest stay is 7 days or less. Then you still need to satisfy one of the material-participation tests for the losses to potentially be nonpassive.

    One commonly used test is 100+ hours and at least as much participation as anyone else. If that’s the test you’re relying on, I’d track not only your own hours, but also the hours of cleaners, contractors, co-hosts, and anyone else working on the property. Your spouse’s participation can generally be combined with yours for these rules, but your children’s time does not simply get added to your total.

    You absolutely can have your children legitimately work in the business and compensate them for real services like cleaning or other age-appropriate work, but I’d document the duties, hours, and reasonable pay separately. That is a compensation issue, not a way to increase your own material-participation hours.

    Since you're closing today, I'd also start documenting your placed-in-service date, furnishing costs, repairs versus improvements, average guest stay, and participation hours from day one. Those records become very important if you later use cost segregation or try to offset other income with STR losses.

    Feel free to DM me, I'd be happy to send over a few resources that might help with STR material participation, cost segregation, and documenting the strategy correctly.

    [email protected]941-914-7779
    INVESTOR FRIENDLY CPA®5241 Reviews
    WebsiteView Page
    TaxMD™ | AI-Powered Tax Planning
    WebsiteView Page
    0Reply
Join the conversationCreate a free account to reply, vote on answers and follow this thread.
Log InJoin for Free