From the view of an Owner/ Realtor/ Property Manager
The Pros and Cons of owning a vacation rental. Are the Cons worth your while? The CEO of Venture Yours (Vacation homeowner, Realtor & Property Manager) breaks it down to help you decide if a vacation rental is right for you.
10 years ago I bought our first vacation rental. I then became a Realtor/Broker, continued to buy vacation rentals, built a Property Management Company and I continue to travel and experience a variety of vacation rentals on my travels. I am happy to let you in on the truths of owning a vacation rental and hope it brings more clarity to your vacation rental decision.
There are clearly many good reason’s to owning a vacation rental; it’s why Airbnb and VRBO have grown exponentially and why Google now offers vacation homes as an option when searching for hotels. Let’s get into the Realities and you can make your decision.
Pro’s / Advantages
Real Estate Ownership. By owning a vacation rental you have added another asset. Over time, the value of the home increases and you have more equity. You can pass the asset down to your children. You have a head start on retirement if you purchase in a place you may be looking to retire. And those are just a few advantages to owning property.
Income. The income you earn from your vacation rental, helps pay your mortgage. In essence you have guests paying into your mortgage.
You have a Vacation Spot. Owning a vacation home means you get to use it how you want. Girls Weekend, Business Gathering, Summer Vacation, etc. You can even use it as leverage when traveling; reach out to a host and offer a trade 😉
Tax Benefits. Are you in need of a tax shelter, this may help. The following are items you may consider using as a write off:
- Hosting Fee’s
- Cleaning Fee’s
- Occupancy Tax
- Insurance Premiums
- Utility Costs
- Lawn Maintenance
- Property Management Fee’s
- Mortgage Interest
Con’s / Realities
As an airbnb manager I am in the position of managing homeowners expectations. There is hype around vacation rentals, but the reality is that every investment comes at some sort cost. You get to decide if that cost is worth it for you.
Cost of Doing Business. You should expect to purchase towels, sheet sets, pillows, etc every now and then. If you are managing the property yourself, you can expect to purchase consumables. Depending on the vacation property Manager, this may be provided. A common list of consumables: Shampoo & Conditioner, Paper Towels, Toilet Paper, Laundry Detergent, Dish Soap, Dishwasher Detergent, Sponges, & Trash Bags.
Wear and Tear. For the most part guests are respectful of your belongings, but over time, wear and tear is expected. On Kitchenware, Pool table accessories, etc. Expect to replace items to upkeep your reviews and in turn your bookings. Your property manager will inspect after guests check out, but there are many items that don’t constitute to be taken out of a guests security deposit, given wear over time. A common fear are in regards to parties in the home; while this may happen, the reality of this is quite minimal
Income Expectations. Income from your vacation rental may not cover 100% of your mortgage. If this is your goal, I advise hiring a real estate agent who is in communication with Vacation Property Management to give you accurate figures.
Usability. A good property manager will maximize your nightly rate while having your place booked. This could mean that the flexibility of using your home may not always be easy. Secret: If you envision using your home often, block 1- 2 weekends every month. If you know you won’t use it, let the property manager open them up.
Hope that helped in your decision making. Having a Vacation Manager will make life easier and they can optimize your prices. But if you are looking to manage the property on your own, find tips in How to Make Vacation Rentals Appealing to Families If your on the fence of wether or not you should hire Vacation Rental Management, read When to Hire a Property Manager
Interested in learning how to make your vacation property stand out from the rest? Read our post to find out more! Or contact us today to list your property with Venture Yours. We also provide long term management services.