Rental Pool

AAA

DEFINITION of 'Rental Pool'

A type of contract-law sharing arrangement. Rental-pool arrangements resemble time-shares in the sense that in both cases, different parties divide the use and expenses of property. Rental pools seek to increase the number of days the home is occupied for a fair rental value and, by doing to, avoid the loss restriction imposed by the IRS.

However, the arrangements have not held water with the tax courts, which have ruled that only the days that a home is actually rented out can be considered fair rental days, not the number of days that the home is available for rent through the rental-pool arrangement.

INVESTOPEDIA EXPLAINS 'Rental Pool'

Rental pools can also be used for personal property, such as computers. They are also applicable for installment purchase agreements, where rental revenue from the property is counted toward the purchase price. They can even be used by such entities as water districts, in the form of water rental pools.

RELATED TERMS
  1. Installment Debt

    A loan that is repaid by the borrower in regular installments. ...
  2. Residential Rental Property

    A type of property that derives more than 80% of its revenue ...
  3. Rent To Own

    An arrangement between a consumer and a seller that allows the ...
  4. Real Estate Investment Trust - ...

    A security that sells like a stock on the major exchanges and ...
  5. Revenue Per Available Room - RevPAR

    A performance metric in the hotel industry, which is calculated ...
  6. Squatter

    A person who settles in or occupies property with no legal claim ...
Related Articles
  1. Budgeting

    Take Advantage Of A Housing Crisis - Rent!

    When a housing crisis strikes, the big winners are often the renters.
  2. Entrepreneurship

    Top 10 Features Of A Profitable Rental Property

    Find out what factors you should weigh when searching for income-producing real estate.
  3. Taxes

    Sell Your Rental Property For A Profit

    Being a landlord can be taxing, especially when you want to sell. Find out how to reduce your burden.
  4. Home & Auto

    Simple Ways To Invest In Real Estate

    Owning property isn't always easy, but there are plenty of perks. Find out how to buy in.
  5. Options & Futures

    Tips For Renting A Vacation House

    Follow these nine steps to get a picture-perfect summer shack at a great price.
  6. Personal Finance

    5 Best Beach Towns To Buy Property In

    These locales offer vacation homeowners scenic views and plenty of amenities. The home prices can't be beat either.
  7. Investing News

    This Company Is No Mickey Mouse Operation

    With its famous history that's become part of popular culture, and the instantly recognizable silhouette in its logo, The Walt Disney Co. is only an animation studio in the same way that Johnson ...
  8. Retirement

    Peri-Retirement: The New Life Transition

    Use your 30s and 40s to imagine new life options – and try them on for size
  9. Entrepreneurship

    6 Wealthy People Who Owned Private Islands

    Larry Ellison and Richard Branson are just two of the people who bought their own private islands.
  10. Home & Auto

    Tax Rules For Renting Out Your Vacation Home

    Here's a rundown of the specific tax rules that apply to homeowners renting out a vacation property.

You May Also Like

Hot Definitions
  1. Fracking

    A slang term for hydraulic fracturing. Fracking refers to the procedure of creating fractures in rocks and rock formations ...
  2. Mixed Economic System

    An economic system that features characteristics of both capitalism and socialism.
  3. Net Worth

    The amount by which assets exceed liabilities. Net worth is a concept applicable to individuals and businesses as a key measure ...
  4. Stop-Loss Order

    An order placed with a broker to sell a security when it reaches a certain price. A stop-loss order is designed to limit ...
  5. Covered Call

    An options strategy whereby an investor holds a long position in an asset and writes (sells) call options on that same asset ...
  6. Butterfly Spread

    A neutral option strategy combining bull and bear spreads. Butterfly spreads use four option contracts with the same expiration ...
Trading Center