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Real estate investing

Are Vacation Homes the Right Investment for You


One of the increasingly growing trends in the rental property field is renting out vacation homes, such as beach houses. As an investment opportunity, it can bring high-paying tenants to you who want to rent out a unit for their seasonal vacations. However, there are certain factors you should consider, such as maintenance, location, and rate of occupancy, before you decide on whether vacation homes are the right investment for you. Learn about the benefits and drawbacks of renting out vacation homes which has similarities to renting out your own home.


Pros of Vacation Home Rental

Renting out a vacation unit offers many benefits that ensure its place as one of the top practices among homeowners and landlords.


  • Seasonal profit. Vacation homes are in demand depending on the location of the property and the season. If you purchase a unit in an attractive place, and furnish the property well, you will create an area in high demand. You can also charge premiums during this time, and if you provide a positive experience, you can enjoy word-of-mouth benefits, such as both new and returning customers.
  • Tax breaks. The government considers the renting of vacation homes a business. Due to this, you are eligible for some tax deductions. Consult with a tax advisor to learn about the state’s taxation system and how it applies to your property. You are eligible to take deductions on property expenses, losses, and some business-related travels you make.
  • Second home benefits. Just like in other real estate investments, a second home will increase in market value the more you hold on to it. If you maintain the building and hold on to it for a while, you can sell it at a higher value than it originally had when you bought it. Plus, you can use this property as your own vacation home during the off-seasons.


Cons of Vacation Home Rental

Before you embrace vacation home rental, there are a few disadvantages you should consider in order to determine if the practice is the right move for you.


  • Holding costs. When you are not making money from peak vacation seasons, you are paying off the property holding costs. Some of the costs you must keep up with include insurance, property tax, maintenance, and sometimes mortgage. These costs can eat up any profits you made from the homes.  
  • Increased risk factors. A vacation home is sometimes prone to more risk factors than a regular property. Most of these risks are related to the weather and terrain conditions, from beach houses and tropic storms to winter cabins and avalanches.
  • Maintenance and care. Just like all properties, a vacation home requires maintenance and care in order to function well. This might become an issue if you prefer life as a distant landlord. Keep up with news about the condition of your property and hire a property manager and contractors to perform routine maintenance on your property.


No matter what kind of property you are renting out, Home365 provides you with the right tools to enhance your property management. Contact us today to set up a free demo of our services.

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