Obtaining an Elgin vacation home can be a nice and alluring choice. 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. Obviously, anyone who has owned and rented out a vacation home can tell you that it doesn’t frequently work out that way. There are numerous pros and cons to owning one or more vacation rentals that you should be aware of. In preparation for jumping into vacation rental ownership, it’s critical to take into consideration all the advantages and downsides.
Pro: Extra Income & Tax Breaks
Quite possibly included in the biggest advantages of owning a vacation rental is the extra income you can get from renting it out. Based on whether you rent it out short-term (days or weeks at a time) or long-term (several months at a time), you could surely earn enough that the property more or less pays for itself.
Con: Another Mortgage Payment & Expenses
Naturally, procuring a vacation rental comes with a mortgage payment, insurance, property taxes, utilities, and other expenses. All of these need to be taken into account when determining to invest in 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
Getting a vacation home implies that it’s yours to put to use whenever you want. This can be fitting if you constantly visit the same location and don’t love staying in hotels. You can additionally use the property for business or personal events, which simply means you won’t have to pay to rent event space anywhere.
Con: Marketing and Screening Tenants
In the event that you are not using your vacation home, you’ll need to market it well to find tenants for the rest of the time you aren’t residing in it. Marketing can be a time-consuming task, as is screening potential tenants. This is exactly true if you prefer to rent your vacation home out for days or weeks at a time. With so much turnover, finding enough tenants to rent the home year-round can be real trouble.
Pro: Building Your Retirement Fund
Investing in rental real estate is one of the best ways to easily grow a healthy retirement fund safely. Rental property owners regularly add 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 can’t be found with any other investments.
Con: Property Management Takes Time
The big benefit of owning a vacation rental will solely happen after years of property management, which will be a lot of work. This is especially 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. Various vacation rental owners are caught off guard at just how much time it takes to prepare for each new tenant, a practice that arises far more frequently than with long-term residential rentals.
There are various appropriate reasons to obtain a vacation home and rent it out. And, even if there are quite a few downsides, enlisting 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 Northwest Chicago Suburbs has a top-notch team of Elgin property managers to help you navigate the market as well as keep your vacation rental profitable. Contact us online or call at 847-892-4040 today!
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