Why You Should Rent Out Your Vacation Home
Why You Should Rent Out Your Vacation Home
If you're lucky enough to own a vacation home, you probably think of it as a pleasant luxury, and little else. While it is certainly a luxury, your second home can also be a valuable source of income. Most likely, you spend no more than half the year at your vacation home—probably less than that. More than likely, your second home is empty for weeks, if not months at a time. Renting out your vacation home when you're not living there makes sense for two main reasons. It will earn you extra money, and it will help to protect your investment from theft and vandalism.
The most obvious reason for renting out your vacation home is to make money. If you're paying a mortgage on a home that you're only occupying for a few months out of the year, renting the house out makes good financial sense. Renting your vacation home means that you can let someone else pay the mortgage when you're not living there, and make some profit on top of that.
Renting your home is a relatively simple task. Since you purchased the home as a vacation home, it's probably in a popular vacation spot, so finding renters shouldn't be difficult. As this is your second home, and not a hotel, you will want to screen the renters to be sure you're comfortable letting them into your home.
While you can conduct your screening interviews over the phone, you'll probably get a better idea about the potential renters if you meet them in person. If you live far from your vacation home, you may want to think about hiring a property manager who works in the area to help screen rental applicants for you. You may also want to have applicants fill out a Rental Application.
Once you've found someone to rent your home, you'll need to write up a Rental/Lease Agreement outlining the cost and length of the rental. If you visit your second home frequently, you may want to rent it out for no more than a week at a time. This way, you won't have to wait for your renters to vacate before using the home yourself.
While your primary reason for renting out your vacation home may be to earn some extra spending money, there is also a more practical reason for doing so. Many people who own a second home only spend a few months in it each year. This means that the house is often unoccupied for months at a time.
If you have neighbours who live in the area fulltime (or, at least, very frequently) you may be able to ask them to watch your home when you're not there, and give them a few dollars to mow the lawn and otherwise take care of the property while you're away. It's quite possible, though, that most of the homes in the area are vacation homes, and are occupied as infrequently as yours is. If this is the case, you should consider renting your home while you're not there.
Unoccupied homes are common targets for theft and vandalism. Real Estate Journal reports that arson, vandalism, and other crimes are a problem in vacant homes in South Bend, Indiana. If your vacation home is frequently unoccupied, you may find yourself coming home to a broken window the next time you decide to spend some time there.
Renting out your property helps to solve this problem. If there are people occupying the house, it is less likely to be the target of a crime. As long as you screen your renters well, you shouldn't have to worry about them stealing from you. After all, they're there for a vacation, not to steal your couch.
Even knowing that it may actually help to prevent crime, you may not feel comfortable letting strangers live amongst your family's personal belongings. This is a natural feeling. However, if you are going to be renting out your vacation home, you should remove any personal belongings such as family pictures or knick knacks while people are renting the home. Not only will this make you feel more comfortable about letting strangers into your home, it will make them feel more comfortable as well.
It's best to make the home feel as much like a hotel as possible while you are renting it out. If your guests are going to have a relaxing vacation, it will be much easier if they feel like they are in a somewhat generic rental property than if they feel like they are temporarily occupying someone else's home. This may be the truth, but they don't want to be reminded of it.
Depending on how frequently you rent your second home, and how often you live there yourself, you may qualify for certain tax breaks, or may not have to report the earnings you make from the rental. These laws will differ by state, so it is recommended that you consult a real estate lawyer or tax attorney to see if your situation qualifies.
If you're away from your second home for extended periods of time, as most people with two homes are, renting it out provides not only a source of extra income, but a source of extra security. If your home is occupied, the chances of it being the target of a crime are greatly reduced. Just place an ad, interview the applicants (after having them fill out a Rental Application), and write up a Rental/Lease Agreement when you find the right people. Renting out your second home is an easy way to protect your property from theft and vandalism, and to make some extra money in the process.