Purchasing a Lebanon vacation home can be an enticing thought. 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. By all means, anyone who has owned and rented out a vacation home can ascertain that it doesn’t normally work out that way. There are several pros and cons to owning one or more vacation rentals that you should comprehend. Prior to jumping into vacation rental ownership, it’s essential to think of all the advantages and downsides.
Pro: Extra Income & Tax Breaks
Possibly classified among the biggest advantages of owning a vacation rental is the extra income you can gain from renting it out. Contingent on whether you select to rent it out short-term (days or weeks at a time) or long-term (several months at a time), you could possibly earn enough that the property more or less pays for itself.
Con: Another Mortgage Payment & Expenses
Needless to say, obtaining a vacation rental includes a mortgage payment, insurance, property taxes, utilities, and other expenses. All of these should be taken into account every time you are considering acquiring 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
Investing in a vacation home denotes that it’s yours to utilize whenever you desire. This can be best if you frequently visit the same location and don’t enjoy staying in hotels. You can moreover use the property for business or personal events, meaning you won’t have to pay to rent event space somewhere else.
Con: Marketing and Screening Tenants
Just in case you are not making use of your vacation home, you’ll need to market it to find tenants the rest of the time. Marketing can be a time-consuming task, as is screening potential tenants. This is particularly valid if you consider renting your vacation home out for days or weeks at a time. With so much turnover, searching for enough tenants to rent the home year-round can be a true challenge.
Pro: Building Your Retirement Fund
Investing in rental real estate is one of the effective ways to enlarge a healthy retirement fund safely. Rental property owners constantly put 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 very few investments can measure up to.
Con: Property Management Takes Time
The big reward of owning a vacation rental will only occur after years of property management, which may be a lot of work. This is true if you are trying to keep your property clean and maintained yourself or your vacation rental is not at a convenient distance from your primary residence. Countless vacation rental owners are surprised at just how much time it takes to prepare for each new tenant, a process that indeed occurs far more frequently than with long-term residential rentals.
There are countless right reasons to purchase a vacation home and rent it out. And, even when there are some downsides, employing the right property management company can help you avoid most of them. Would you like to learn more about smart approaches to managing vacation rental properties? Real Property Management Indianapolis Edge has a top-notch team of Lebanon property managers to help you navigate the market as well as keep your vacation rental profitable. Contact us online or call at 317-420-8500 today!
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