Procuring a Spring Branch vacation home can be an enchanting idea. You can treat it as your own vacation house whenever you want to relax, or you can even rent it out to others so you can cover other expenses. But, anyone who has ever owned and rented out a vacation home will definitely tell you that things aren’t always what they seem. There’s more to owning vacation rentals than you know. Before you decide on a vacation rental ownership of some sort, make sure to dive deep into all the important aspects.
Pro: Extra Income & Tax Breaks
One of the best things that you can get out of owning a vacation rental is the extra income you get from renting it out. Depending on whether you choose to rent it out short-term (days or weeks at a time) or long-term (several months at a time), it could be that your property is able to pay for itself.
Con: Another Mortgage Payment & Expenses
Of course, buying a vacation rental comes with a mortgage payment, insurance, property taxes, utilities, and other expenses. All these points must be taken into consideration when deciding on 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
Ownership of a vacation home essentially means that you can do what you please with the property. It allows you to frequent that location without having to spend money staying at hotels. You can also use the property for business or personal events, meaning you won’t have to pay to rent event space elsewhere.
Con: Marketing and Screening Tenants
You can look for tenants to market your vacation home to if you have no plans to frequently occupy it. Marketing can be a time-consuming task, as is screening potential tenants. This is made more challenging if you plan to rent out your vacation home for days or weeks at a time. It will be a big task to find tenants who will rent year-round since the turnovers are fast.
Pro: Building Your Retirement Fund
Do you want to slowly but surely grow your retirement fund? If so, investing in rental real estate is one of the best ways to do that. Rental property owners often include their rental income or property sale into their retirement plans. Unlike the volatile stock market or savings account that offers little interest, real estate can provide you with both safety and growth that no other investment can provide.
Con: Property Management Takes Time
Owning a vacation rental may sound amazing, but it takes a lot of work to make it work. It will take years of property management before a payoff comes. What’s even more problematic is if you have to keep your property clean and maintained all by yourself, or if your vacation rental is far from your primary residence. Unlike long-term residential rentals, vacation rentals involve preparations that come with each new tenant — something known by most vacation rental owners!
Renting out your vacation home comes with great benefits. Just make sure to steer clear of the most common mistakes made by a lot of first-time investors. Better yet, hire a good property management company to help you avoid those mistakes! Would you like to learn more about smart approaches to managing vacation rental properties? Real Property Management West has a top-notch team of Spring Branch property managers to help you navigate the market as well as keep your vacation rental profitable. Contact us online or call at 832-532-9800 today!
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