Should I Rent Out My Vacation Home – Extra Income Requires Extra Careful Attention to Details
You may already be asking yourself, “Should I rent out my vacation home?” Many vacation home owners choose to rent out their homes when they are not using them. Renting your vacation home has the obvious benefits of creating extra income to offset the day to day operational costs. Therefore, if you can figure out how to keep it rented most of the time, you could pay for the mortgage payment and have some left over. So when you are considering a vacation home renting it out may be a viable option.
It is not unrealistic for second homes to rent for several thousand dollars per week in good locations, but you will have to worry about keeping it rented which can be harder than it sounds. There are a number of websites were you can advertise you home at very little cost. If you don’t have time for the management and operation of your vacation home yourself then there are other avenues that are available, such as hiring a management team. If you hire a management team, you will have to give them some of the money from the rent that you generate to offset their costs. This question is up to you–do you prefer to do it yourself hands on and keep the money and hassle to yourself, or do you want to hire someone else to handle the management and operation of your vacation home rental while taking a smaller percentage of the rental money?
When considering on whether you should rent out your vacation home, getting people to stay there isn’t the only consideration. In addition to keeping the house rented, you will also have to worry about potential maintenance costs. Since you will have a constant stream of people in the house you will also have to worry about making repairs occasionally–certainly more often than if you let it sit empty. Are you ready to field 3 to 4 calls for each day it’s rented? Do you have a list of service providers (plumbers, electricians, HVAC techs, etc) who can fix the issues quickly so as not to disrupt your guests? Again this can go back to a management question–a good management team will have experience in this area while taking one more concern off your shoulders.
There are also a number of vacation home tax benefits offered by the IRS–however this is between you and your accountant, since the benefits you qualify for vary based on your income. You should think these option thru thoroughly before making this decision.
Whatever you decide, you would do well to at least ask yourself, “Should I rent out my vacation home?” There are benefits and downsides to every option-not renting, renting yourself, or renting through a management company. Whatever you decide when you are considering a vacation home remember that at the end of the day this is YOUR vacation home–so make sure you are getting the most out of it!