Procuring a Lutz vacation home can be an enchanting idea. It could be your go-to vacation space, but at the same time be a house for rent to cover expenses for most of the year. And yet, anyone who has ever owned and rented out a vacation home will tell you that things won’t always go according to plan. Owning vacation rentals will always have pros and cons. That’s why, before you decide on vacation rental ownership, be knowledgeable of what you’re getting yourself into.
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. 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
A personal vacation home means that it’s available for your use, whenever you want. This is a good idea if you frequently visit the same location without wanting to stay at a hotel. 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. This is made more challenging if you plan to rent out your vacation home for days or weeks at a time. A constant turnover will create difficulty in terms of finding tenants who will rent the house year-round.
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. 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. It’s even more work when you have to keep your property clean and maintained by yourself, or if your vacation rental is far from your primary residence. A lot of vacation rental owners are taken aback by the time required to prepare for each new tenant, something that rarely happens with long-term residential rentals.
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 Freedom has a top-notch team of Lutz property managers to help you navigate the market as well as keep your vacation rental profitable. Contact us online or call at 813-867-2667 today!
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