The current state of the housing market may not be the best, but that doesn’t mean you need to put your plans of vacation rental ownership on hold. With a great real estate agent, you can still find a reasonably priced home that can be converted into a vacation rental and earn you an extra income. There is a chance that these affordable homes, however, are going to be fixer-uppers. If so, that’s ok! If owning a vacation rental has been on your mind and you’re trying to decide if it’s right for you, here are some pros and cons of purchasing a vacation rental as well as one that needs a little bit of love.
The pros of buying an investment property
The number one reason people get into investment properties is to earn extra income. More and more, travelers are opting for actual homes than hotels, ensuring their getaway is as comfortable as possible. When done right, a vacation rental can be a big earner. Here’s what to look for when choosing a home to buy:
- Location and time of year. The Texas Hill Country is one of the hottest vacation spots in the nation with beautiful year-round weather, amazing historical markers and monuments, plenty of outdoor activities, and non-stop things to do for the entire family. There’s never a dull moment in the Hill Country, which means there’s always a need for a vacation rental.
- Amenities. The more accommodating your home, the more likely you are to attract renters who could also potentially become repeat renters.
A vacation rental is a great way to build your financial portfolio and can help you plan for your financial future. Real estate is an investment that tends to appreciate in value over time with the ability to add to its value not only for the future but for its earning potential. When you’re ready, selling your home could earn you some large profits.
Your personal getaway spot
One of the best aspects of investing in a vacation rental is you’ll always have a place to stay when you’re in need of your own getaway. You can earn extra money while saving it when you want to take a vacation of your own. What could be better?
And, of course, more tax deductions
With vacation rental home ownership comes a variety of tax write-offs for business-related expenses. From the cost of third-party hosting sites to utilities and guest supplies, there are ample opportunities for tax deductions. At Vacay Hill Country, we make the tax process easier by providing you with tax statements pertaining to your vacation rental.
The cons of owning an investment property
No matter how much we plan, things happen. This is especially true of vacation rental home ownership. Even when we budget for normal expenses, there’s the possibility something will come up that we’re not prepared for. Regular maintenance on a home will aid in preventing unforeseen expenses but it’s important to understand that even then, something might come up.
Local vacation rental laws and permits
Some areas are easier to maintain a vacation rental home than others. Depending on the location and the rules of an HOA, a vacation rental may be subject to particular rules that you wouldn’t find anywhere else.
Property upkeep and maintenance
Just like the homes we reside in, a vacation rental home needs proper maintenance and upkeep to retain its value and livability. If you’re planning to manage the vacation rental on your own, this can become time-consuming and more work than anticipated. When deciding to purchase a vacation rental home, it’s important to keep in mind that you’ll technically be managing two households.
The benefits of purchasing a fixer-upper
When it comes to the cons of owning a vacation rental home, the good news is these are things that can all be managed. And there’s good news when it comes to opting to choose a fixer-upper for your vacation rental. First, chances are that you’re going to get a very good deal on this home as a lot of fixer-uppers are sold “as is”. While they may sound like a lot of work, a fixer-upper gives you the flexibility to design the home the way you want and in a way that’s going to help maximize your vacation rental’s earning potential. It will also give you an idea of what works and what doesn’t when it comes to vacation rental ownership, which will help prepare you for the next one.
Whether you’re purchasing a fixer-upper or a new home for your vacation rental investment, Vacay Hill Country is here to make your vacation rental home experience a pleasant and profitable one. For more information on our services, visit our Property Management page. We look forward to working with you!