Acquiring a Southport vacation home can be an attractive idea. You can use it as a personal spot for times when you want to go on vacation mode, or you can rent it out to others so you can cover other expenses, as well. Nonetheless, anyone who has ever owned and rented out a vacation home will tell you that there will be hiccups along the way. Truth be told, there’s a lot more to owning vacation rentals than meets the eye. Don’t dive headfirst into vacation rental ownership without doing your due diligence.
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’s quite possible that you could get enough back to let the property 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. These specifics must be taken into account when buying 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’s a great way to save on money since you won’t have to spend on 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
If your vacation home is not being used, you’ll need to market it to potential tenants. Marketing can be a time-consuming task, as is screening potential tenants. When you plan to rent out your vacation home for days or weeks at a time, things become more difficult. A constant turnover will create difficulty in terms of finding tenants who will rent the house year-round.
Pro: Building Your Retirement Fund
If you want steady growth in your retirement fund, investing in rental real estate is a great means towards that goal. Rental property owners often include their rental income or property sale in their retirement plans. Real estate gives you both safety and growth, unlike the volatile stock market or savings account with little interest.
Con: Property Management Takes Time
It will take years before you can taste the reward of owning a vacation rental, and it will take solid property management. How much more if you have to keep the property clean and maintained by yourself, or if your vacation rental is significantly far from your primary residence. Vacation rental owners will tell you how tedious it can be to prepare for each new tenant; something that, unfortunately, rarely happens with long-term residential rentals.
Renting out your vacation home comes with great benefits. Getting a good property management company will save you from the most common of mistakes, though. Would you like to learn more about smart approaches to managing vacation rental properties? Real Property Management Champion has a top-notch team of Southport property managers to help you navigate the market as well as keep your vacation rental profitable. Contact us online or call at 910-782-4488
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