Obtaining a Miami vacation home can be a fascinating idea. You can have your own vacation house, and you can also use it as a rental property throughout the year to help with expenses. Nonetheless, anyone who has ever owned and rented out a vacation home will tell you that there will be hiccups along the way. Owning vacation rentals will always have pros and cons. Don’t dive headfirst into vacation rental ownership without doing your due diligence.
Pro: Extra Income & Tax Breaks
A really good reward 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), your property can come to a point where it will 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. All these particulars need to 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 benefits you most when you visit the particular location often — then you won’t need 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 you are not interested in staying in your vacation home for most of the year, you can rent 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 into their retirement plans. The beauty of the real estate is that it can offer safety and growth, unlike other investments like the volatile stock market or the savings accounts that give 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. There are a good many vacation rental owners who will testify to the challenges that come with preparing for each new tenant — something that is not frequently dealt with in long-term residential rentals.
If you own a vacation home, renting it out can really serve to benefit you. However, if you’re not careful, you can fall into a lot of common mistakes. Good thing you can hire a property management company to avoid that! Would you like to learn more about smart approaches to managing vacation rental properties? Real Property Management Dade has a top-notch team of Miami property managers to help you navigate the market as well as keep your vacation rental profitable. Contact us online or call at 305-501-1511 today!
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