Published on June 12th, 2018 | by Millennium Magazine Staff0
Owning A Vacation Home Is More Affordable Than Many Realize
When you’re not on vacation, your second home can be at work, too, earning money as a rental.
(NAPSI)—Relaxing by the water or in the mountains is more than a once-a-year vacation for people who own a second home, and the explosive growth of the vacation home rental industry has put the dream of affording a vacation home within reach for more people. For those who already own a second home, the increasing popularity of renting those homes to others is boosting retirement savings, college tuition payments and disposable income.
How It Works
Here’s helpful information to know when estimating how much you can earn by renting out a second home to others: Vacation home owners who list their properties for rent on one site, HomeAway.com®, garner an average of $32,000 each year, according to HomeAway data. That income lets most owners cover a significant chunk of their mortgage payment each year, 75 percent or more. The numbers get even more appealing if house payments are split among more than one owner. In fact, nearly one in three vacation homes are owned by multiple people, typically family members and friends.
What You Should Know
Here’s what potential buyers should consider before taking the plunge into buying and renting out a vacation home:
• HomeAway.com offers a free online tool called “Earn” that lets you enter a home’s address and other information, then presents a range of rental income potential based on nearby high-performing, like-sized properties already being rented out. The tool is available at HomeAway.com by clicking on “List Your Property” or going directly to www.homeaway.com/earn.
• Calculate more than the mortgage. Vacation home owners often must pay for additional insurance coverage and may want to hire professional cleaners between guests. New owners may need to invest money to get a house guest-ready with fresh paint and linens, as well as for professional photography for the online listing. Also consider the tax obligations on the home’s income, as well as any local or state tax that may apply to the home as a rental property.
• Be realistic about how much time the house will be available to renters. The typical vacation home on VRBO.com is occupied by renters 18 weeks a year, leaving plenty of time for use by the owners’ family and friends. Owners who use their homes during peak travel times will earn less than those who block their calendars during less popular vacation times.
• Decide whether managing the property is a do-it-yourself project or is better left to a professional property manager to handle reservations, guest communications, cleaning and maintenance. Homeowners report they spend seven hours a week managing their vacation homes when they do it themselves.
Vacation rentals continue to grow in popularity each year. Travel research firm Phocuswright measures the private accommodation industry in the U.S. alone to be worth nearly $37 billion by the end of this year, a figure that is growing at twice the rate of the travel industry’s.
For further information on the financial opportunity of renting a second home, visit www.homeaway.com/earn.