Procuring a Greensboro vacation home can be a pleasing concept. You can have a place of your own to go on vacation and rent it out to others the rest of the year to help with expenses. Naturally, anyone who has owned and rented out a vacation home can attest that it doesn’t constantly work out that way. There are countless pros and cons to owning one or more vacation rentals that you should perceive and understand well. In anticipation of jumping into vacation rental ownership, it’s vital to think about all the advantages and downsides.
Pro: Extra Income & Tax Breaks
Perhaps part of the biggest advantages of owning a vacation rental is the extra income you can obtain from renting it out. Depending on whether you prefer to rent it out short-term (days or weeks at a time) or long-term (several months at a time), you could probably earn enough that the property more or less pays for itself.
Con: Another Mortgage Payment & Expenses
Obviously, possessing a vacation rental is associated with a mortgage payment, insurance, property taxes, utilities, and other expenses. All of these should be taken into account whenever opting to get 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
Purchasing a vacation home insinuates that it’s yours to do with whenever you wish. This can be befitting if you regularly visit the same location and don’t want to stay in hotels. You can further use the property for business or personal events, which means you won’t have to pay to rent event space in another place.
Con: Marketing and Screening Tenants
In the times you are not making use of your vacation home, you’ll need to market it well to find tenants the rest of the time. Marketing can be a time-consuming task, as is screening potential tenants. This is especially true if you choose to rent your vacation home out for days or weeks at a time. With so much turnover, looking for enough tenants to rent the home year-round can be a serious problem.
Pro: Building Your Retirement Fund
Investing in rental real estate is one of the appropriate ways to raise a healthy retirement fund safely. Rental property owners always integrate their rental income or property sale into their retirement plans. Unlike the volatile stock market or savings accounts with little interest, rental real estate offers a combination of safety and growth that few other investments can measure up to.
Con: Property Management Takes Time
The big return of owning a vacation rental will happen after years of property management, which could be a lot of work. This is definitely certain if you are trying to keep your property clean and maintained by yourself or your vacation rental is not at a convenient distance from your primary residence. A lot of vacation rental owners are taken unaware of just how much time it takes to prepare for each new tenant, a process that develops far more frequently than with long-term residential rentals.
While doing research on every potential income property is a lot of work, Real Property Management of the Triad can help lighten your load. We offer free rental property analyses for investors, which can help you more easily identify whether the income property you want to buy is a profitable option. Contact us online or call us at 336-355-6677 or 336-777-7444 to learn more!
We are pledged to the letter and spirit of U.S. policy for the achievement of equal housing opportunity throughout the Nation. See Equal Housing Opportunity Statement for more information.