Investment Property Management for Vacation Homes


It s no good news all around. As with any real estate investment, there are pitfalls, costs, and drawbacks associated with renting a vacation home. They all deserve equal attention, however – especially if you plan on a healthy bottom line following investing in vacation rental properties. Rental property investing is like a mixed martial arts match; everyone knows that you get what you pay for. Yet there are plenty of ways to get the most bang for your buck.


The first thing that you need to consider is whether you are really considering renting the vacation home or really renting the principal residence itself. You can rent both. This means that you will have two expenses (in addition to the actual monthly rental fee): your mortgage payment and your mortgage insurance premium. A savvy renter may choose to rent only part of the house and use that money to pay down their primary residence and put extra money away in a savings account.

However, remember that renting a vacation home does come with its own set of issues. First, you will not have a “real” residence. If anything should happen to the rental unit, such as fire or smoke damage, water damage, theft, vandalism, or a broken heater, you will not have a place to stay until you either return to the rented house or find alternative lodging. The same is true if the tenant leaves town before paying the rental fees – they will have to pay to stay in a hotel until their case is resolved.


Second, the investment cost of renting vacation homes can be high. The vacation home itself is usually located at a time where there is little demand for residential real estate. In other words, it may be next to an ocean and/or in a popular vacation destination city. That means that your rental property will be far from the best places to earn an income. You also need to consider the rental income potential of the location.

There are ways to make up those losses in investment property rental. One way is to rent out a portion of the vacation home in the city where you live. Another is to advertise your vacation rental in your local area on free websites, Craigslist, etc. A third way is to contact professional property management companies to help rent your vacation home. Property management companies will do all of the work of screening tenants, advertising in your local area, collecting the rent, managing your vacation home, paying your outstanding obligations (such as insurance and taxes) and anything else that is necessary.


It is important to remember that vacation rentals are not “permanent” rentals. You will be able to “withhold” rent during the period of your contract. In other words, you can reserve your spot for a week or two, but then you will not be able to stay for more than a few nights. The more nights you plan to stay, the more you should plan to budget for the expenses of renting out your home over the long-term. Investing in vacation homes is a long-term business that requires long-term commitment. Be sure that your investment decisions are well thought out and that you will have enough money to maintain the property for at least the time it takes you to completely pay off your mortgage and move out.

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