Global tourism has increased exponentially since the late 1940s. People are looking to travel anywhere and everywhere that’s beautiful. As it turns out, the world has a lot of vacation destinations to offer.
If you don’t have a vacation home already, it may be time to invest in one. But, you don’t want that home sitting empty every time that you aren’t there. Instead, you should turn it into an investment opportunity!
More specifically, you should make it a vacation rental property. With so many travelers every year, you’d be helping people by providing a great space to vacation in, while making money in the process.
To learn more, keep reading
Perks That Come With Owning a Vacation Rental Property
From financial rest to retirement planning, vacation rental properties hold a lot of potential. And, vacation real estate is extremely popular. This is especially true with the growth of platforms like VRBO, Airbnb, Booking.com, that make it easy for guests to rent your home.
So, you have the demand for the property and the desire to have a vacation property of your own. Now, let’s cover some other perks that you may get while owning a vacation rental property.
You’ll Make Extra Income
This is arguably the biggest perk of owning a vacation rental property. It’s an investment opportunity that makes you money without you even thinking about it. Once you have your property listed on all of those rental sites, with the right host or manager, you just need to sit back and watch the profits come in.
Hosts on Airbnb earn $900 per month on average from renting out their property. If your vacation home is located in a city with high demand for tourism, you could make four or five times that much per month!
And, again, that’s just on Airbnb. That isn’t even counting the other platforms out there.
In fact, if you’re curious to see how much you can earn, calculate your earning potential now.
The more days that your property is listed for, the more exposure it’s going to get. So, plan on keeping a full schedule of guests for all of the times that you aren’t vacationing there.
If you are worried about mortgage costs, fees, and more, it’s likely that these are going to be more than covered by the income generated from guests. If you have an effective strategy for bringing in these short term renters, you can do more than cover all of these costs. This means that you are not only paying down your vacation home, but you can make additional profit to stash away for the future.
You’ll Have a Vacation Home
If it wasn’t obvious already, owning a vacation rental property means that you’re going to have a vacation home for yourself. So, you should choose a property in a place that you love or wish to visit during certain times and seasons of the year, assuming you don’t already have a vacation home.
Worried about using the benefits of your own vacation home? Don’t be. You’ll be able to easily take advantage of everything your home has to offer when it makes sense for you. All you have to do is block off these dates on a calendar where your property is listed. Then, no one can rent the property during those times and you’ll have the place to yourself!
You can host girls’ weekends, family reunions, bachelor parties, summer vacay getaways, and more. The possibilities are endless. And since it’s your property, you have the control.
Normally, planning a trip like that, you’d have to go through the hassle of finding a place to stay and paying outrageous prices for the location, amenities, and hope there’s room for everyone.
Now, you already have a place to stay. And you’ll save money on your travels that you can use for experiences instead.
You Can Write Off Expenses
If you rent out your vacation home for more than 14 days, you now have a business. That means that you need to financially account for this business when it comes to taking care of your taxes. More specifically, you’re going to have to pay taxes on the money that you’re bringing in from this business.
But, there’s an upside to this: write-offs. Write-offs can help decrease the amount of taxable income that you have. Thus, you’ll not have to pay as much as you normally would have.
You can deduct any “ordinary and necessary” cost that has to do with repairing and maintaining the property. Here are some ideas:
- Host Management fees on vacation rental websites like Airbnb
- Cleaning costs for the home
- Utility costs
- Supplies for guests such as toilet paper, coffee, towels, and more
- Lawn maintenance costs
- Occupancy taxes
- Insurance premiums
- Property management fees
- Mortgage interest
Yes, all of these things are deductible and can help you avoid paying more taxes. So, keep track of your expenses down to the penny. And, if you’re renting often we recommend having a separate bank account and credit card to keep track of these charges. For more tax saving advice, we recommend getting in touch with a tax lawyer who can help you maximize your savings and write-offs.
You should also keep in mind that any changes you had to make because of the COVID-19 pandemic also count as write-offs.
You’ll Have a Retirement Home
There are two ways that this can go.
First, you can use the vacation home to make money over time. Then, you’ll be building long-term wealth and ensure that you have money saved up for your retirement plan.
Then, you can sell the home down the road and use this money for your future costs of living, traveling, and more.
Or, you can keep the place and use it as your retirement home!
Either way, you’ve made a great investment that you can be proud of in the future, which will literally pay for itself.
If you’re considering using this vacation home as a future retirement home, you’ll want to be thoughtful about the location. Of course, you want to make sure that you’re investing in a home in a location that you’d actually like to live. Otherwise, you’re going to be left with a retirement home that doesn’t serve you much purpose.
Manage Your Vacation Rental Property
Managing your property is the hardest part of owning a vacation rental property. You have to make sure that your listings are accurate, keep your calendars up to date, constantly clean and stock your home for your guests, and manage time consuming tasks like check-in/check-out and guest communication.
Or, do you?
With our expert Airbnb management services, you don’t have to worry about any of these things. With our Preferred plan, we will take care of your property listings and upkeep, along with all of your guest interactions.
Get in touch with us today so that we can get started on helping you make the most of your vacation rental property. Once we get to work, you won’t have to worry about a thing.