Vacation Rental Ownership-Is If For You?

Vacation Rental Ownership – Is It For You?

Investment properties used to be homes and multi-family properties used for full time rentals.

Over the past decade, we’ve seen a new crop of investment properties emerge, the short term

rentals. But what’s involved in owning a vacation rental? Is it worth the work?

A short term rental is a great investment for a number of reasons. In addition to creating

annual income for the investor, the property could also appreciate in value during the time of

ownership. Although the short term rental is still a rental property, it often pencils out to

much higher income than a traditional long term lease does.

Vacation Rentals might seem like a great deal of work, and they can be. The first choice a

vacation rental owner will need to make is whether they would like to self-manage or hire a

property management company. Many short term rentals are managed by a professional

property manager that specializes in the short term market. These managers have people on

call to help with arrival, departure, cleaning, repairs and rent collections. While they do charge

for their services, a professionally managed vacation rental can provide a nice income stream

by building positive reviews.

Of course there are downsides to owning this kind of investment. It’s important to choose the

right location to ensure a steady stream of renters. Additionally, one must budget for

unexpected repairs or damage. With the deposit being made with a credit card, it can be

difficult to collect for damage done to the home.

The Internet has been instrumental in the new vacation economy as peer-to-peer platforms

like Airbnb, VRBO and HomeAway offer visitors the ability to interact directly with the owner.

By reducing the advertising costs, investor-owners, can negotiate directly with potential

renters and screen them to prevent possible problems.