Maximizing multi-locational living benefits

Allworth financial advisor Dan Rausch, CFP^®, explores strategies for maximizing the financial and lifestyle benefits of owning and living in multiple homes, including tax optimization, property management, and estate planning tips.

For high-net-worth families, owning homes in multiple locations is a hallmark of a lifestyle defined by freedom, opportunity, and luxury. But with that lifestyle comes unique financial and logistical challenges—and opportunities. Whether you’re splitting your time between coasts, spending summers by the lake, or escaping to warmer climates during winter, it’s important to ensure you’re making the most of your multi-locational living setup.

Let’s explore strategies to optimize your lifestyle while minimizing taxes, simplifying logistics, and preserving your wealth.

1. Choose Your Primary Residence Strategically

One of the first things to consider is which property to designate as your primary residence. In the U.S., your primary residence determines your state of domicile for tax purposes—and this decision can have significant implications.

High-tax states like California, New York, or New Jersey can create hefty tax burdens, while states like Florida, Texas, or Nevada, which don’t impose state income tax, could save you substantial amounts over time.

However, establishing residency in a tax-friendly state isn’t as simple as claiming a second home as your domicile. States often scrutinize where you spend your time, where your financial accounts are based, and even where your doctor or lawyer resides. To avoid complications:

• Track Your Time: Keep accurate records of how many days you spend in each state. Most states require you to spend more than 183 days (over half the year) in a location to claim it as your primary residence.
• Update Key Documents: Make sure your driver’s license, voter registration, and financial accounts reflect your primary residence.
• Work with a Tax Advisor: Navigating residency rules can be complex, so it’s crucial to work with an advisor who understands multi-state tax laws.

2. Take Advantage of Homestead Exemptions

If you’re living part-time in a state that offers a homestead exemption, you may be able to reduce your property taxes. These exemptions, available in many states, lower the taxable value of your primary residence, resulting in significant savings.

For example, Florida’s homestead exemption provides property tax relief and caps annual property value increases for tax purposes. However, you can only claim the exemption on one property, so it’s worth calculating where it will make the biggest impact.

3. Optimize Travel Costs with Credit Card Rewards

For families who frequently travel between homes, credit card rewards programs can help offset some of the costs. High-end travel rewards cards like the Chase Sapphire Reserve or Amex Platinum offer perks like airline credits, lounge access, and rewards points that can be redeemed for flights or other travel expenses.

If you’re flying private or chartering flights, some cards even offer discounts on services like NetJets or Wheels Up. While the savings may seem modest in the context of a larger wealth strategy, it’s always a good idea to optimize where you can.

4. Leverage Property Rental Opportunities

If you’re not using one of your homes year-round, renting it out could generate passive income and offset some ownership costs. However, you’ll need to understand the tax and logistical implications:

• Short-Term Rentals: Platforms like Airbnb or Vrbo can make it easy to rent your property while you’re away, but short-term rental income is generally subject to federal and state income tax.
• Long-Term Rentals: Leasing a home for extended periods may provide steadier income while reducing wear and tear compared to short-term rentals.
• Tax Deductions: If you rent out a home, you may be able to deduct expenses like maintenance, property management fees, and depreciation.

Keep in mind that renting out a property may trigger local regulations or HOA rules, so it’s worth consulting with a property management expert or tax advisor.

5. Manage Maintenance with Trusted Professionals

Owning multiple homes means double (or triple) the maintenance responsibilities. Hiring local property managers or caretakers to oversee upkeep can save time, minimize stress, and protect your investment. Look for professionals who can:

• Perform Routine Maintenance: Regular checks can prevent costly issues from snowballing.
• Prepare Homes for Seasonal Use: Opening or winterizing homes ensures they’re ready when you need them.
• Coordinate Vendors: A good property manager will have reliable connections for landscaping, cleaning, and repairs.

While this is an added expense, having trusted professionals on the ground ensures peace of mind, especially when you’re away.

6. Understand Estate Planning Implications

Owning homes in multiple states can complicate estate planning. Each property may be subject to probate in its respective state unless you’ve taken steps to avoid it. To streamline the process for your heirs:

• Establish a Revocable Living Trust: By placing properties in a trust, you can bypass probate and simplify asset transfers.
• Consider an LLC: Holding properties in a limited liability company (LLC) can protect your privacy and reduce legal risks while making it easier to transfer ownership.
• Work with an Estate Attorney: Multi-state ownership adds complexity to estate planning, so consult an expert who specializes in this area.

7. Maximize Your Lifestyle

Finally, don’t forget why you chose to live in multiple locations: to enjoy the best of what each place has to offer. Invest in experiences that make your time in each home meaningful, whether it’s connecting with the local community, pursuing hobbies, or creating memories with family and friends.

Final Thoughts

Multi-locational living offers incredible flexibility and opportunities, but it requires thoughtful planning to make the most of it. From tax optimization to property management, the right strategies can help you minimize stress, preserve your wealth, and enjoy the lifestyle you’ve worked so hard to create.

If you’d like to explore how multi-locational living fits into your broader financial plan, let’s connect. Together, we can craft a strategy that works for you—wherever life takes you.

Dan Rausch, CFP®

Financial Advisor

As a certified financial planner with both tax planning and CFO experience, I understand how complex financial situations require an intentional approach. I’m passionate about educating you to make sound decisions because I understand what’s at stake for you. Wealth management is more than choosing the right investments. It also involves deliberately preserving your wealth, so you feel confident in your tax strategy and family estate plan.

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