Take all the costs including utilities and see if you can cover things with a rental inclusive of utilities and still make a profit.

Is the only way to effectively utilize equity to buy the property outright so I would only be paying the interest on the loan leveraged on the equity?

Do any STR tenants pay utilities?

What’s more important is that your CPA has deep experience working with real estate investors — especially those who own both long-term and short-term rentals — and understands strategies like cost segregation, depreciation, and short-term rental material participation rules.  

Do you have any recommendations on courses, books, or materials to learn from? 

Yes, the hours you spent setting up the property before it was officially rented can count toward material participation.

With our twelfth STR closed or under contract including several prime luxury STRs on the Oregon Coast this year - I thought it would be prudent to share some answers to common questions regarding LLC Closings or transferring properties to an LLC or Trust post closing as we approach the close the window on material participation for 2025. 

Look for evidence of SOPs for smart-home technology to curb utility use, bulk buying of supplies, or in-house maintenance teams that reduce reliance on expensive third-party contractors for common fixes.What types of properties do you manage?

All rehab costs, materials, utilities, loan interest, and property taxes are deductible business expenses.

I do think you need to find a way to address 6 and 22 that takes care of your concerns (things break and no you don't own the utility companies so yes if the electric goes out they need to talk to the electric company but they still have to pay rent) and that may require revising this section for clarity.