Pro: Extra Income & Tax Breaks
Definitely, among the biggest advantages of owning a vacation rental is the extra income you can get from renting it out. Whether you consider renting it out short-term (days or weeks at a time) or long-term (several months at a time), you could most likely earn enough that the property more or less pays for itself.
Con: Another Mortgage Payment & Expenses
Certainly, getting a vacation rental comes with a mortgage payment, insurance, property taxes, utilities, and other expenses. All of these should be taken into account when deciding on procuring a vacation rental. Additionally, financing for an investment property can cost more since lenders often require a larger down payment and charge higher interest rates on second homes.
Pro: It’s Yours to Use
Possessing a vacation home happily means that it’s yours to use whenever you need it. This can be good if you usually visit the same location and don’t relish staying in hotels. You can equally use the property for business or personal events, meaning you definitely won’t have to pay to rent event space at another place.
Con: Marketing and Screening Tenants
If you are not using your vacation home, you’ll need to market it to find tenants for the rest of the time. Marketing can be a time-consuming task, as is screening potential tenants. This is precisely true if you plan to rent your vacation home out for days or weeks at a time. With so much turnover, searching for enough tenants to rent the home year-round can be big trouble.
Pro: Building Your Retirement Fund
Investing in rental real estate is one of the efficient ways to safely increase a healthy retirement fund. Rental property owners usually add in their rental income or property sale into their retirement plans. Unlike the volatile stock market or savings accounts with little interest, rental real estate offers a combination of safety and growth that few other investments can fulfill.
Con: Property Management Takes Time
The big profit of owning a vacation rental will really come along after years of property management, which can possibly be a lot of work. This is primarily correct if you are trying to keep your property clean and maintained yourself or your vacation rental is not at a convenient distance from your primary residence. Plenty of vacation rental owners are taken by surprise at just how much time it takes to prepare for each new tenant, a process that happens far more frequently than with long-term residential rentals.
There are plenty of decent reasons to invest in a vacation home and rent it out. And, even though there are a small number of downsides, recruiting the right property management company can help you avoid most of them. Would you like to learn more about smart approaches to managing vacation rental properties? Real Property Management Cairn has a top-notch team of Bedford County property managers to help you navigate the market as well as keep your vacation rental profitable. Contact us online or call at 434-215-3028 today!