Possessing a Little Elm vacation home can be a good and appealing option. You can have a place of your own to go on vacation and rent it out to others the rest of the year to help with expenses. Without a doubt, anyone who has owned and rented out a vacation home can often tell you that it doesn’t at all work out that way. There are various pros and cons to owning one or more vacation rentals that you should clearly understand. Just prior to jumping into vacation rental ownership, it’s imperative to consider all the advantages and downsides.
Pro: Extra Income & Tax Breaks
Most likely, one of the biggest advantages of owning a vacation rental is the extra income you can acquire from renting it out. On the basis of whether you have to rent it out short-term (days or weeks at a time) or long-term (several months at a time), you could potentially earn enough that the property more or less pays for itself.
Con: Another Mortgage Payment & Expenses
Naturally indeed, acquiring a vacation rental comes along with a mortgage payment, insurance, property taxes, utilities, and other expenses. All of these should be taken into account carefully to determine whether or not to purchase 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
Obtaining a vacation home means that it’s yours to enjoy whenever you feel like it. This can be the best way if you always visit the same location and are not really fond of staying in hotels. You can also easily use the property for business or personal events, meaning you won’t have to pay to rent event space in a different place.
Con: Marketing and Screening Tenants
In the times that you are not using your vacation home, you’ll get to market it to find tenants the rest of the time. Marketing can be a time-consuming task, as is screening potential tenants. This is definitely true if you make up your mind to rent your vacation home out for days or weeks at a time. With so much turnover, going after enough tenants to rent the home year-round can be a great challenge.
Pro: Building Your Retirement Fund
Investing in rental real estate is one of the best approaches to increase and grow a healthy retirement fund safely. Rental property owners generally count 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 other investments can not equal.
Con: Property Management Takes Time
The big perk of owning a vacation rental will only roll in after years of property management, which can be a lot of work. This is mainly true 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. Quite a lot of vacation rental owners are caught by surprise at just how much time it takes to prepare for each new tenant, a process that takes place far more frequently than with long-term residential rentals.
There are quite a lot of suitable reasons to buy a vacation home and rent it out. And, though there are various downsides, working with 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 Focus has a top-notch team of Little Elm property managers to help you navigate the market as well as keep your vacation rental profitable. Contact us online or call at 469-820-0088 today!
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